IRON AND STEEL BILL

HC Deb 17 March 1953 vol 512 cc2086-202

Order for Third Reading read.

4.17 p.m.

The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low)

I beg to move, "That the Bill be now read the Third time."

We are today again to consider the Iron and Steel Bill as a whole after the very thorough and detailed examination to which the House has subjected it during the Committee and Report stages. Our discussions during those stages, which covered a number of highly important points, some of which, as hon. Members will remember, were technical and complex, were conducted in an atmosphere, not only of good temper, but also of helpful co-operation, from all sides of the House.

My hon. Friend showed by his handling of the debates how anxious he was to seek the highest common factor of agreement between us, and I think that right hon. and hon. Gentlemen opposite shared that aim with him. That does not mean, of course, that there are not important differences, both of principle and approach, between us, which during those two stages were effectively and properly exposed.

My right hon. Friend has on two occasions paid tribute to the right hon. Member for Vauxhall (Mr. G. R. Strauss) and to his hon. and right hon. Friends behind him for the part which they have played in all this. I should like very humbly to add my thanks to them, and particularly to the right hon. Gentleman, for the courtesy, fair-mindedness and constructiveness which has been shown to me in my not infrequent interventions. I also thank my hon. Friends for their kindness and help. Many of them, and, indeed, many hon. Members opposite, have far longer experience than I of the problems of this industry. Their experience has been of great value to all of us.

The right hon. Member for Vauxhall, in his turn, paid a tribute during the two previous stages of the Bill to my right hon. Friend. It would be out of place for me to add to that tribute, but perhaps I might say this. The high tone of our debates was set by my right hon. Friend in speeches of a standard which I cannot expect to maintain today, but it will be my hope, as it was the expressed wish of the right hon. Member for Vauxhall, that our discussion today should be conducted in the same atmosphere of helpful cooperation which has prevailed throughout the eariler stages.

Mr. Wilfred Fienburgh (Islington, North)

Soft music in the background.

Mr. Low

I propose, first, to refer to the main changes which have been made since Second Reading, and then, very briefly, to explain the reasons for the confidence with which we commend the Bill to the House. I will start with some statistics about the changes. In all, 82 Amendments have been made to the Bill. Of these, nine were moved by the Opposition, 29 were Government Amendments designed to meet, in whole or in part, points made by the Opposition and four Government Amendments were made to meet points put forward by my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon). Those figures show how far we have been able to go in our search for the highest common factor of agreement.

There have indeed been some important changes which we welcome, but there has been no departure at all from the principles underlying the Bill, principles stated by my right hon. Friend in his speeches during the debate on the White Paper and the Second Reading debate last year. The main changes are these: In Part II of the Bill changes have led to the extension of the power of the Minister in one respect, to some extensions of the functions of the Board, and to a better definition of the scope and functions of the Board particularly in relation to castings and forgings. The two main changes in Part III of the Bill affect the relationship of the Board and the Holding and Realisation Agency in regard to regroupings and clarify the duty of the Agency as to the price to be secured in their disposal operations. Lastly, there are important changes in the provisions relating to compensation in Clause 24.

I will now deal with each of these points separately. The first main change relates to iron ore overseas and extends the power of the Minister under Clause 5. The Bill as originally drafted confined to Great Britain the reserve power of the Minister to provide and use iron and steel making plant including facilities for quarrying and mining iron ore. Following Amendments to Clause 5 the Bill now extends this power of the Minister to cover the quarrying and mining of iron ore overseas and its shipment if the Board first recommend that he should use that power.

One of the main responsibilites of the iron and steel industry is to secure adequate supplies of overseas iron ore to complement supplies of the leaner home ore. Increases in foreign ore supplies are particularly important to feed the great increase in blast furnace capacity, which has begun and will continue. The industry itself has made important and far-reaching contracts and agreements for the supply of iron ore involving countries in various parts of the world. Their arrangements look forward to a substantial increase of production in Great Britain—to some 20 million ingot tons of steel in the next five years—for which they are planning. There is no reason to suppose that they have been or will be slow or reluctant to do their best to secure what is, after all, vital to their very existence, or that direct intervention by the Government is in any way necessary.

Despite the fact that it remains the responsibility of the industry to secure those supplies, it seems to us right that the Bill should include a reserve power for the Government as a precaution—namely, a power either to undertake the whole of a scheme for the exploitation and development of iron ore resources overseas or to participate in a joint scheme if, for any reason, the industry cannot secure adequate supplies of ore. Before the Government can make use of this power they will, of course, have to come to Parliament in the normal way for money to be voted.

I pass from the power of the Minister to the functions of the Board. The new Clause 4 will give statutory effect to earlier statements made from this Box that there will be close, full and continuous consultation between the Government and the new Iron and Steel Board in regard to the policy to be pursued by the Government in their relations with the Schuman Authority on iron and steel problems. I know that it has given considerable pleasure to my right hon. Friend to be able to include this new Clause in the Bill.

It is impossible properly to consider the problems of the British iron and steel industry in isolation from the progress and fortunes of iron and steel manufacturers in other countries. It is not only impossible, but it would obviously be wrong to try to do so. It was always our intention that the new Board should have regard to conditions overseas in estimating the industry's competitive position and in watching for anything which might reduce supplies of iron and steel at home or their exports overseas. A small Amendment to Clause 3 (1), moved by the hon. Member for Lichfield and Tamworth (Mr. Snow) makes this even more clear.

The next important change relates to foundries. As the House knows, there are about 2,000 iron and steel foundries, many of which are relatively small. The large number of foundries ensures that there will be over the wide range of foundry products a higher degree of competition than there may be in the heavy end of the steel industry. The small size of most of the foundries made it unnecessary for their development proposals to be subject to the consent of the Board.

Both the price power and development power originally gave the Board wide discretion and, as my right hon. Friend indicated during the Second Reading debate, we were quite certain that the Board would not have fixed maximum prices for the majority of foundry products and would not have called for particulars of the normal foundry development proposals. Since, however, we intended that the Board should not act in that way and since strong doubts and anxieties were expressed, it seemed right that the Bill should more closely define these powers of the Board.

The new provision governing prices of foundry products was readily accepted by the Opposition but, largely I think because of misunderstanding, the Opposition opposed the new subsection in Clause 6, which specifically excludes foundries from having to submit development proposals to the Board for their consent. The preceding Clause, Clause 5, which makes a positive approach to development, covers all iron and steel activities, including casting. This new subsection is the only new provision in the Bill against which the Opposition divided the House, yet it was inherent in the Bill as originally drafted that foundry schemes in general would not be subject to the Board's development veto.

If hon. Members opposite still argue, as they have argued at earlier stages, that the new subsection weakens the contribution which the Board might make to improvement of working conditions in foundries, they must be under a misunderstanding. Their argument surprises me—I say this in all sincerity—when I consider the large amount of careful study they gave to the Bill and the very considerable knowledge—again, I say this with some humility—and ability they have shown about the Bill. The argument frankly amazes me when I look back to Opposition statements during the White Paper debate and the Second Reading debate.

The right hon. Member for Vauxhall may not even remember, as it was some months ago, but they were arguing against the use of negative controls at all. On 23rd October the right hon. Member said: … most people think this is a very bad and pernicious control. …"—[OFFICIAL REPORT, 23rd October, 1952; Vol. 505, c. 1389.] Apparently their argument now is that this "bad and pernicious control" is necessary and good to achieve an indirect purpose which is already catered for in other ways, for the Government without this Bill and the Board within this Bill are both concerned with working conditions in foundries.

The Government are very directly concerned through the factory inspectors of the Ministry of Labour and the factory regulations and the Board are concerned through consultations in pursuance of their duty in relation to their health, safety and welfare arrangements—where those are not part of engineering firms' arrangements. I must make it clear again that we attach every bit as much importance to conditions of health, safety and welfare as do the party opposite.

Mr. Frederick Lee (Newton) rose——

Mr. Low

As this is important, perhaps I may finish this point and then the hon. Member may interrupt.

We are only differing with the Opposition in arguing that the Bill as amended does not reduce the attention which the Board or the Government will give to secure those conditions.

Mr. Lee

Would not the hon. Gentleman agree that, as the Government accept the necessity for implementing the Garrett Report on safety in foundries, they thereby agree that the Factories Acts are not adequate to cover the points on safety which we tried to make on behalf of the people who work in them?

Mr. Low

I do not think I do agree with what the hon. Gentleman says. I know that many advances have been made, as the hon. Gentleman has acknowledged, since the Garrett Report; and, as he is also aware, my right hon. and learned Friend the Minister of Labour has tabled some new draft regulations on foundries. That seems to me an excellent and positive approach to these very important matters, and I think they are far better dealt with by that means and by improving consultative arrangements in industry so that there can be constant improvement, which we all want to see.

Opportunity was also taken during the Committee stage to clear away some doubts about the definitions of "forging" and "rolling" by introducing more detailed definitions into the Schedule. The revised Third Schedule has stood the test of further examination by technical experts in the industry, as it stood the earlier test of examination by the hon. Member for Rotherham (Mr. Jack Jones), who advised the Opposition on these matters. The House will, I think, now be satisfied that iron and steel rolling and forging are included, but that engineering operations, hammering, shaping, bending and pressing are excluded.

There have been three other important changes in Part II of the Bill. The first of them affects the Board's consultations. The Board are under an obligation, in carrying out their duties and exercising their powers, to consult such organisations as they think fit representatives of producers, workers, consumers and merchants. Some specific provision was made for consultation in the original draft, but we were anxious, as were the Opposition, that the Board's discretion to have the fullest consultations should not be limited in the Bill, and we were glad to be able to work out a simple way of achieving that.

The second of these changes makes it clear that the Board, in their consultations with industry about future development and the use of existing facilities under Clause 5 of the Bill, can and shall have regard to employment considerations and other national interest considerations to which the Minister may have asked them to have regard. It never entered our heads that the Board could not or would not do so, or that the Minister would not constantly keep the Board informed on such matters, but after hearing so many doubts so strongly expressed during Committee we thought it right that the Bill should remove those doubts.

The third of these changes, namely, in the Board's information powers, has been exhaustively discussed. Clause 15 now enables the Board to obtain from producers all the information necessary for their functions, and to obtain information about imports from such common service bodies as the British Iron and Steel Corporation. The new subsection (2) makes it clear that the Board must exercise its powers so as to be informed in advance of all closures of substantial units in the industry—a point to which both sides of the House attached much importance.

On Part III, the Clauses relating to the Agency were also thoroughly discussed in great detail, but only two important changes have been made, both of which define more clearly how the Agency will act in certain circumstances. As originally drafted, the Bill provided for consultation between the Agency and the Board about any proposal to merge or regroup Agency companies. What would have been done if the Board and the Agency disagreed? In practice, I think the Agency would have consulted the Government, who would have taken responsibility and made the decision.

As a result of our discussions, Clause 19 now provides that if in such circumstances the Board advise against the proposal in the terms of the Clause the Agency shall not implement it unless the Treasury direct them to do so; and that the Treasury shall only direct them to do so if they have laid a minute before Parliament and two sitting weeks have elapsed since that minute was laid.

The other change affecting the Agency relates to the Agency's duty as to the price to be secured in its disposal operations. All sides of the House want to ensure that a fair price is secured for the taxpayer, and at the same time that the Agency shall pay due regard to other major considerations affecting disposal—the efficiency of the industry, leaving it in good shape, and so on. My hon. Friend the Financial Secretary to the Treasury mentioned them in his speeches to the House, and the hon. Member for Rotherham emphasised the importance of these other considerations on several occasions at earlier stages of our discussions.

Assurances have been given from this bench on a number of occasions that a fair price would be secured and that these valuable assets would not be sold for a song. Ultimately, the Chancellor of the Exchequer is responsible to this House, and my comparatively short experience of Parliamentary life and my much shorter experience of Government life leaves me in no doubt that the Treasury would be the very last authority in the world to sell anything for a song.

However, some hon. Members expressed serious apprehension on this point and, as my hon. Friend the Financial Secretary said, it is not unnatural for hon. Members to prefer a statutory provision to the most sincere of Ministerial assurances. The effect of the Amendments made on this point is to incorporate almost word for word the words of paragraph 34 of the White Paper issued last July.

I am not going to say anything more now about the machinery, centred in the Agency, for restoring the Corporation companies to private ownership, except this. As our debates proceeded I became more than ever convinced of the wisdom of keeping the Agency's functions sharply separated from those of the Board.

Before I leave the changes that have been made in the Bill, I said I would refer to the Amendments made to Clause 24, the compensation Clause. That Clause now corresponds to Section 41 of the 1949 Act in providing compensation for employees of iron and steel companies who suffer loss as a result of denationalisation. There may, however, be a few cases which might not be covered by the wording of the Clause, but in which serious hardship might be proved. My right hon. Friend explained during the Committee stage that he would expect the companies concerned to show just as much sympathy and generosity in considering those cases as the hon. Member for Rotherham told the House the former Government expected the Corporation companies to show on nationalisation.

We also thought it right to make a change so as not to exclude in advance the possibility of bringing employees of the Iron and Steel Corporation within the scope of the compensation regulations. The House may like to know that the T.U.C. with whom my right hon. Friend has been, as he said, in consultation, have expressed themselves satisfied with the Clause as it now stands, in view of the assurances given to the House by my right hon. Friend.

In general, it is true to say that these improvements in the Bill—for so they are—have their origin in the constructive and critical examination to which the Bill has been subjected by both sides of the House. Last week the right hon. Member for Vauxhall told us of his revised views of the Bill. He indicated that the improvement was sufficient to enable him to remove one "very" from the triplicate of "verys" which he prefixed to the word "bad," the adjective he attached to the Bill.

We on this side—by our nature may be—are less wont to use the superlative, and we were content when we introduced the Bill to call it a good Bill. I shall now make use of the one "very" which the right hon. Gentleman has shed and call it a very good Bill. Today, of course, the quality of the Bill is a matter of opinion. I will tell the House in a moment why we are confident that it is a very good Bill.

In the years ahead there will be ample opportunity to judge from experience how the Bill works in practice. We hope that in forming their judgment on the structure of the industry and particularly of the Board hon. Gentlemen opposite will make the same objective and fair-minded approach that they made to points that arose in Committee and on Report. During each stage of this Bill we sought—and, I think, succeeded—with the agreement of the party opposite to allow time for full discussion of all the important points that arose on the Bill.

I have no doubt that, following our example, the electorate will allow plenty of time in future years for hon. Gentlemen opposite to examine closely the success in practice of the Board and of the Bill.

I am sure that hon. Gentlemen opposite will agree that though we may differ about our respective approaches to the problems that are the concern of this Bill and though we may differ on important matters of principle, these differences relate to the means by which the iron and steel industry may be best able to reach the highest standard of efficiency and otherwise to serve the national interest.

We do not differ about that end which is desired by hon. Gentlemen in all quarters of the House and by both sides of the industry. The Bill seeks to provide the conditions in which this industry may produce and supply the very wide variety of its products, products which are essential to British industry and to industry overseas as well, and to provide them of the quality, at the economic prices and in the quantity which the consumer wants. That they should do just this is, indeed, the first and most important way in which the iron and steel industry can serve the national interest.

As the Conservative Party have consistently argued in recent years, it is right that because of the industry's importance to the national interest there should be public supervision over it. Few will challenge me when I say that one of the many difficult mid-20th century problems facing us is to devise the best means of co-operation between Government and industry and co-operation inside industry between management and workers.

A number of different methods have been tried in different industries. I would not claim that the method chosen in this Bill should necessarily serve as an exact pattern for other industries because I know of no other industry of the same or similar structure, but I am sure that the results of our labours here will be useful to others.

The achievement and the virtue of this Bill are that a system of effective public supervision, evolved out of considerable experience in the iron and steel industry itself, is coupled with conditions of private and diverse competitive ownership. In these conditions the ordinary laws of human nature and economics can best stimulate efficiency, low cost, high quality and adequate quantity. Thus, we have chosen deliberately to leave the individual companies free to manage their own affairs, subject first, to the minimum necessary control powers, and, secondly, to the general guidance of the Board on matters of industrial policy. The industry is of course, subject also to the various laws and powers of the Government which apply to the whole of industry generally.

The Opposition have from time to time sought to give the Board more control power, particularly in regard to development and information. We had long debates on those subjects. The approach of the Opposition to the degree of control to be incorporated in the Bill differs from ours, as our debates have clearly shown. Indeed, this difference of approach was the main difference between us in Committee and on Report.

In our view, too much control leading up to too much bureaucracy would defeat one of the very objects we all have in mind, namely, an efficient and developing industry. We are sincerely convinced that the Board will have all the powers they need. The Board's comprehensive duties are clearly set out in Clause 3. They will fulfil these duties by influencing the general policy of the industry. For this there are in our view three essentials—first, certain powers on vital points, secondly, the ability to obtain all the necessary information, and, thirdly, the respect of the industry.

The Bill, as far as a Bill can, makes these three essentials possible. The cooperation of the industry and the work of the chairman and members of the Board will provide the rest. It would be a great mistake to under-estimate the effectiveness of the Board's ability to secure proper prices, and through them to help promote efficiency. It would be as great a mistake to argue that by the use of their price-fixing powers they can impose prices which are commercially unsound. That would be contrary to their duties and to the working of Clause 8 (1). That is also true of any price fixing by the Minister under this Bill. It would also be a great mistake to under-estimate the importance of the functions of the Minister and of the Board in relation to development. Though both the Minister's powers to provide and use plant and the Board's powers will in ail probability be used very rarely, those powers exist and will certainly be used if necessary. With the powers in the background and with their prestige the Board will surely have a fully effective say over development.

I do not forget that the national interest in the industry may go even wider than the Board's duties. The Minister is given certain powers in the Bill to carry out new developments, or to keep existing plant in use, and to vary prices. But, in the main, those other considerations relating to the nation's interest, such as full employment policy, location of industry, capital investment, tariff policy and allocation controls in time of shortage are covered by general Government policy and general governmental powers which affect the whole of industry and which we cannot discuss here today. The Government will, of course, always consult the Board on such matters, and, in appropriate cases, make use of the Board's services under Clause 3 (2).

From time to time in our debates we have been able to break away from discussing organisation and the principles to which I have been referring and to break away from some wordy arguments which we had with the hon. and learned Member for Kettering (Mr. Mitchison) on some occasions. Having done that, we have looked at the human side of this great industry. I am not, of course, accusing the hon. and learned Member for Kettering of never looking at the human side.

The ultimate test of every single provision of the Bill will be whether it better enables the men who work in the industry to give of their best. These men—management, skilled technicians, engineers, scientists, and all the workers—have a great tradition of successful work together and of contented relations with each other. By that human test, as well as by the broad test of national interest, this Bill will in due course be judged.

It is because we are confident that the Bill will satisfy both tests—and will better satisfy both tests following the changes that have been made in it in Committee and on Report—that I now commend it to the House for Third Reading.

4.50 p.m.

Mr. Jack Jones (Rotherham)

I wish to continue the debate in the spirit in which discussions on this subject have been carried on during the past few weeks. First, I would thank the Parliamentary Secretary for the courteous way in which he has admitted to the House that Her Majesty's Opposition have conducted themselves in a very fit and becoming manner. The hon. Gentleman now claims that this Bill, if not perfect, is as perfect as we can make it. I must tell him that the amended Bill, despite the splendid work done by hon. Members on both sides of the House—particularly those on this side, because we claim responsibility for the majority of the changes—does not satisfy and cannot be accepted by Her Majesty's Opposition.

The Parliamentary Secretary stuck to his brief, as is usual in such circumstances, and as the brief was prepared by people who are paid to be truthful he spoke the truth. He said that the Bill serves the best interests. That is true. It certainly serves the best interests of the people seeking to benefit from the changes being brought about by its provisions. We on this side of the House do not argue about that.

I was expecting the Parliamentary Secretary to tell us, at long last, why this Bill is necessary. He talked for a long time about details of the industry; about the provision of raw materials; welfare; the good spirit which exists in the industry, and so on. But during the whole of our discussions on this Bill neither he nor anyone else has told us why the Government seek to alter the present set-up in the iron and steel industry. I have read and re-read the reports of our debates. I have searched diligently for reasons why this Bill is necessary, because all the things which the Parliamentary Secretary claims that this Bill will do are now being done. I say that definitely, and I defy contradiction.

No one qualified to do so has told us why this Bill is necessary. The Parliamentary Secretary said that he was not well versed in the subject. We do not hold that against him, but there are plenty of people behind him who are. If it were true that the present set-up in the industry had failed the public interest in any way we could understand the necessity for bringing forward this Bill. But there is not one jot or tittle of evidence before the House to that effect.

All the things which this Bill seeks to do are being done, with one exception. The Bill seeks to put back into the hands of a few the power to increase their profitability as the result of the endeavours of management and workers in the industry. That is the only reason for the Bill. At the last Election the Tory Party promised the electorate that the industry would be handed back to private enterprise. But it is too bad that they should come to this House without real evidence of the necessity for this Bill, or proof that the existing set-up has failed the public interest. It is a shocking thing that this Bill should go on the Statute Book without any effort being made to prove that nationalisation has not served the public interest.

I know why Her Majesty's Government will not seek to prove that the existing set-up has let the country down. It is because we, when we were in power, were shrewd enough to see that they would not be in a position to do so. We left the existing managements as they were. It is not possible for anyone to say, on "D day" or "X day" or any other day when private enterprise takes over, that X, Y or Z organisations can produce more than is being produced at the moment, because if they could then for some considerable time the management of those organisations have been sabotaging the industry under the present set-up.

I come back to the point that the intention of this Bill is purely political, to hand this industry back to those who care to buy part of it—for only part will be sold. When the steel workers come under the new organisation, in addition to making steel they will be expected to make an increased amount of profit for the new owners. Otherwise, what is the purpose of people buying the industry? They do not do it with any altruistic intent, but solely for the purpose of regaining a position in which they may feather their own nests and, at the same time, secure greater economic and political power; because those who control this industry have great economic and political power.

We on this side of the House intended from the start to be objective and constructive about the Bill. We should have been foolish to be otherwise. I once attended a savings group meeting where one of the highest dignitaries in the land asked me why I was interested in National Savings. I was quick to tell him. I said that the Labour Government would be coming into power in 1945 and we wanted to ensure there was sufficient money in the kitty to take over.

For the same reason, we are being objective and constructive in our attitude to this Bill. We wish to establish the best possible financial and technical structure so that it will be ready to be taken over when a Labour Government is returned to power. Sooner or later, that day will come and we shall put the industry back under public ownership and control. Therefore, we should have been foolish to try to wreck the Bill. But with all its improvements it does not meet our requirements.

The Parliamentary Secretary spoke of many things; about the provision of iron ore; about the relationship in the industry; about the foundry industry; about forging and rolling, and the sociological context of the Bill, but he did not give us any reason why this Bill is necessary and I want to return for a moment to that point. We maintain that the existing setup does all that the Bill seeks to do. We say that the highest possible quantity of steel is being provided from the existing capacity. When in opposition the Prime Minister said that there would be chaos, that the industry would be ruined under the present set-up. From the time that statement was made six or seven years ago, every return has proved that the production figures have risen. Of course, we shall be told that they result from the scheme formulated by the Iron and Steel Federation; but that scheme was formulated in rather a hurry, when the Federation saw that nationalisation was imminent. It is no use hon. Gentlemen opposite shaking their heads. That is true. It was the declaration of the Labour Party which hurried things on.

I should be a fool if I said that all that has happened in relation to output has happened primarily because of the efforts of the men. The good results have been achieved primarily by the efforts of all concerned. Everybody, from top to bottom, has played his part. That is one of the reasons we suggest that the Bill is absolutely unnecessary.

We were told that the Minister has taken certain powers. Of course, he has taken powers to do whatever may be necessary as a result of any failure in the set-up which is proposed. But if everything will be just as it should be under the Bill, as the Minister always tell us, why should it be necessary to take powers to build a steel works, for instance? There is the question of giving the Board power to seek out additional ore resources. That work is being done now by the Iron and Steel Corporation. One of the first jobs that it did was to tackle the question of raw material supplies.

The Parliamentary Secretary was not quite right—perhaps he made a slip; I do not think he intended to mislead the House—when he said that the industry had made provision. It was the Corporation, representing, owning and controlling the industry, which made the provision. All the activities he mentioned are being carried out today.

We had long and detailed discussions during the Committee and Report stages. It would be wearying and perhaps discourteous to go over the whole field again. The longer we have discussed this Measure the more apparent has it become, especially to the men in the industry, that no real power or control is to be vested in the Board. The men are aggrieved about this. As the House knows, I have always advocated good relationships in industry. I have always refused to have anything to do with the strike weapon. Strikes have to be settled round tables and I believe in getting round the tables first and talking about strikes later.

Last Saturday, however, I was requested to appear in my constituency to receive a deputation of accredited officials from my trade union. I was asked whether I would lend my name in support of a token strike in our industry as a result of this Bill. That ought to alarm the House. Naturally, I refused at once to have anything to do with any such nonsense. The place for action against a Measure of this kind is here on the Floor of the House and at the ballot boxes. I advised my constituents accordingly. But I quote what happened last Saturday to give hon. Members some idea of the mood of the workers.

I may be twitted by hon. Gentlemen opposite who may say that there has been no official document recently from the trade unions. Of course there has not. There is no need to reiterate what we have said since 1932. What the workers said then they say again in 1953. They stand 100 per cent. behind the demand they made then for the public ownership and control of this great industry.

It is too late to ask the Minister to do anything about this Bill. Some people do not like the sort of thing which I am, about to say, but as good democrats we shall accept the decision of this House. As good craftsmen and workpeople we shall do our best in the national interest. In its final analysis it cannot be suggested that the Measure can improve in any way the present physical and technical structure of the industry. The moral of the industry is good, and management is good. A fair and reasonable amount of money goes to those who have financial holdings in the industry.

This Bill seeks to do nothing but to return the better parts of the industry, the lucrative profit-making parts, to private enterprise. I do not refer to "private enterprise" as the man in the street understands that term, but to financial interests remote from the industry which have one intention, and one only, and that is to increase profits. Increased profits in any industry can be earned only at the expense of those who work in it—[HoN. MEMBERS: "Oh."]—or at the expense of the price of the article which is produced.

Mr. Spencer Summers (Aylesbury)

Is the hon. Gentleman trying to assert that profits can be increased only at the expense of the workers? Surely he knows enough about industry to know that that is not true.

Mr. Jones

The interjection came before I had completed the sentence. I said that increased profits could be made either at the expense of wages paid to the workers or at the expense of the consumers by an increase in price. If it is a question for argument, perhaps later the hon. Member will tell us how he would co-relate the two considerations—the man working for the privately owned, modern, technical, highly efficient plant where good profits and good output are achieved at low labour costs, with the man in that portion of the industry which is inefficient and where wages are less likely to be good because of lack of profit.

I have spent 37 years negotiating wages and conditions. I know how easy it was to meet Federation representatives in the good works and to get concessions, and how difficult it was to get anything like the same concessions in the bad works. I know the industry backwards in that respect, but I do not want to be led away from my main point.

When a difference of wage structure is suggested, arising from an increase in profit in one part and a lack of profit in another, and the workers see what has happened as a result of this Bill, that will be the time when they will express their point of view much more vociferously. Not a solitary word has been adduced to show why this Bill is necessary. I assure the Tory Party that we shall maintain our attitude and seek the repeal of this Measure when we get the opportunity.

5.9 p.m.

Mr. Hugh Fraser (Stafford and Stone)

Many hon. Members must hope that, after about seven years of debate on the nationalisation of the iron and steel industry, we have now reached a final point——

Mr. R. E. Winterbottom (Sheffield, Brightside)

We have not.

Mr. Fraser

The hon. Member for Rotherham (Mr. Jack Jones), for whom everyone has a great respect, made but one point. He tried to bring back this issue to the politics from which the industry has suffered so much during the last few years. Hon. Members of this House of Commons should occasionally turn from this valiant battle, in which many of us have been engaged in the last eight years, and direct their thoughts towards the industry itself in order to see the successes which have been achieved there. First, there is the increase in steel production from something like 12½ million tons in 1947 to 17 million tons today; next, there is the question of price, which compares very satisfactorily with prices all over the world, and many other points, on which a satisfactory comparison could be made. Let us also consider what has been said in this House by some hon. Gentlemen opposite to encourage that success, and what effect this House has had on the successes of the steel industry.

If we look back over the last 20 years, I think this House should pause to consider how much any political party or any Government can achieve over the conduct of the steel industry. We look back at the record of success which has been achieved, and we find that it compares with any achievement elsewhere, even in the United States of America, and we see that that success has been conditioned chiefly by one thing—the demand for steel. The hon. Member for Rotherham told us what he and his party were wanting to do in 1932, but let me remind him that this demand for steel was created by the Conservative Party by imposing tariffs in 1931, 1932 and 1934.

Mr. Jack Jones

Will the hon. Gentleman allow me? He will not want to mislead the House. I did not say what my party wanted to do in 1932, but what my trade union was advocating then, and it was a policy of public ownership and control, which was endorsed by the T.U.C. I also said that we are saving the same thing in 1953.

Mr. Fraser

What the hon. Gentleman's party did in 1932 was to vote against the imposition of the tariffs. If one looks for the cause of this prosperity, we find simply that this demand for steel was first created by my party by the protection given to the industry in 1932–34. It was followed up by the I.D.A.C. and continued by the rearmament boom prior to the war, by the war itself, and by the period of inflation throughout the world following the war. Now, after all these debates, we must reach the conclusion that the one thing which no Bill introduced into this House of Commons can affect fundamentally is the demand for steel. That is the central point which we must bear in mind after all these long debates of the past few years, and it is a point on which I think we should find agreement on both sides.

Mr. S. S. Awbery (Bristol, Central)

If there was such a great demand for steel during the period of the war and after, why was it that, for five years after the First World War, there was 22 per cent. of unemployment in the steel industry?

Mr. Fraser

I will take up the hon. Gentleman on that point, and would remind him that, even in the case of Sir William Firth and the question of Ebbw Vale, it was not a question of the industry itself, but one of world conditions, and, maybe, the overall policy of the Government of the day; but that situation cannot be affected by an actual Bill relating to the steel industry being introduced into this House.

If we look back over the last few years, we might find the answer to the question which an hon. Gentleman asked a moment ago as to what was wrong with the Nationalisation Act of 1949. There was nothing wrong with that Nationalisation Act in this sense—that it was never fully imposed, and some of us saw that there were grave dangers in that Bill which, if it had been imposed completely, would have had very serious consequences. I think I could carry most hon. Members of the House with me when I say that we must recognise what are the powers of this House of Commons and of any Government that may be in power. Unless we are prepared to accept the full Socialist doctrine of the complete control of all the means of production, distribution, and exchange, we realise that the powers of Parliament should be powers of supervision and control over the industry. I believe that that is what is necessary, and that——

Mr. Fienburgh

The hon. Gentleman has said that he believes it is necessary that there should be powers of supervision and control over the industry. Why, then, did he not support us when we sought to include the words "and control" in the Bill, instead of leaving it in its present state?

Mr. Fraser

In that case, I withdraw "control" and stick to "supervision," because supervision is the most that can be achieved.

Mr. Fienburgh

I can only invite the hon. Gentleman, in view of the radical change in the whole content of his speech, to start again at the beginning and on a different pattern.

Mr. Fraser

I think that the hon. Gentleman should look at the matter again, when he will find that many of the points I have made, which may be described by hon. Gentlemen opposite as relating to powers of supervision or control for the purposes of this Bill, may be more exactly declared to be only supervisory.

I think it will be agreed that the advantage which this Bill carries with it is that it gives to Parliament a more effective instrument of supervision over the whole industry, rather than certain parts of it, as was done by the Act of 1949. Secondly, I believe that it gives a chance both to Parliament and the industry itself to cease from the struggle which has been described by some journalists of the Left as the struggle between "Steel and the People." If one looks back over this struggle, one can see how absurd were some of the myths which were created about the wickedness of the armament firms when the suggestion was made that they should be nationalised, and which quickly fell to the ground. There was the reiterated myth over the finances of the industry, but, when one looks at some of the best steel companies in the country, we find that they were created by financial brains.

Mr. G. R. Mitchison (Kettering)

Will the hon. Gentleman allow me? I am older than he is, and I should like to ask him if he is aware that, at the time of the Battle of the Somme, the armament manufacturers in this country were circulating one another recommending that they should not disclose to the Government their costs and profits. The hon. Gentleman will find that in the report of an inquiry into the trade which was made subsequently.

Mr. Fraser

That was in 1915. Does the hon. and learned Gentleman suggest that that sort of thing still goes on, and that all these things have not been put right by 1953, and that there has been no improvement? [Interruption.]

Mr. Gerald Nabarro (Kidderminster)

Whips should be seen and not heard.

Mr. Fraser

The same applies to the international cartels and to all those arguments that were put forward. They relate to something which has only just been re-established by the High Authority for the Western European Iron and Steel Community. All these arguments have fallen to the ground, and now we are faced with the necessity for having adequate supervision of the industry in this country.

We maintain that the instrument now put forward by this Government is infinitely superior to that put forward by the last Government, and I believe, for this simple reason alone, that the very fact of confusing ownership with supervision was bound to lead the Board or Department concerned into new difficulties. Simply because of the confusion about supervision and ownership, it followed automatically that the Corporation, which should have been an umpire, would have ceased to act in that capacity and simply have become a player in the game.

Some gentlemen may be surprised, but they should not be confused, by some of the things that they may have seen going on round Tothill Street. There may have been at one time an apparent refusal of co-operation between the Iron and Steel Federation and Mr. Stephen Hardie, but that does not mean that eventually these difficulties could not have been overcome. The fundamental interests of Steel House and of the Government's Corporation were identical as steel producers.

Mr. George Chetwynd (Stockton-on-Tees)

Surely they refused co-operation long before the Minister had appointed a chairman of the Corporation.

Mr. Fraser

I was explaining that if things had gone on for a few weeks or months longer we might well have seen—to use the hon. Member's own happy phrase—the steel barons and Mr. Hardie feeding out of the same trough. If supervisory control and ownership remain in the same hands, the natural tendency is for the interests of the owner to be placed first and for the manager to see only the point of view of the management. It is fair to say that in commerce a public board is no more able than is a private firm able to ignore commercial interests. We find today in the case of other industries which have been nationalised by the late Government that public boards coupled with public ownership tend to be dangerously capitalistic in their use of power.

Mr. Fienburgh

Is the hon. Member arguing that the use of capitalistic power is dangerous?

Mr. Fraser

The use of any power can be dangerous. The use of a power of monopoly can be extremely dangerous, and that is our objection to the present set-up. Public boards coupled with public monopoly tend to syndicalism and holding the community to ransom. The public board of a publicly-owned industry tend either to look after the interests of the producer or to become commercially useless and unable to fulfil the conditions laid down by the Act of Parliament of 1949.

I believe that Mr. Hardie and others on the Iron and Steel Corporation had begun to see that even if a Socialist regime had been returned it would have been necessary to create a supervisory body such as my right hon. Friend has now created. But it would have had to be imposed on top of an industry dangerously disunited and divided by the terms of the cumbersome 1949 Act. In this Bill my right hon. Friend proposes to go a little further. He proposes to appoint a supervisory board over the whole industry, to separate supervision from ownership and to repeal an Act of nationalisation which in itself never proved effective and had in it dangers which my right hon. Friend and others have explained again and again in this House.

I believe that this supervisory Board will be superior to the former system. They are not commercial and not as concerned as were the old corporation with the interests of the producer as such. This Board will be above these matters and can take into consideration all the factors which have to be weighed. The point of supervision for the purposes of this Board is to be the national interest; and from our experience of commercial nationalised boards which control ownership as well as supervision, that function of ecological judgment, of weighing all the factors, is bound to be obscured by the commercial interests of such boards.

I believe that this Board will be a better judge of such factors as the location of industry, strategic considerations, import policy—in conjunction with the Minister—labour relations, and prices. Here I must remind the hon. Member for Rotherham that on this last point, at least, the powers of the Board are stronger and stricter than were the powers of the Corporation.

Mr. G. R. Strauss (Vauxhall)

No.

Mr. Fraser

If the right hon. Gentleman compares Section 3 of the 1949 Act with the powers given to the Board in this Bill, he will find that the powers of the proposed Board are greater.

This Bill achieves what I am sure the whole House has come to regard as the chief necessity for this industry—seeing that the iron and steel industry has adequate supervision in the best national interest. The forms put forward by the late Government have proved unsatisfactory. They did not cover the whole industry. They did not have the confidence of the whole industry, because inside Steel House itself these arrangements caused a split, and they sometimes caused a split inside the very conference system itself.

This Bill is in the tradition of something that has helped to make the British steel industry effective, even if I believe that the system of control formerly imposed on the industry has not been massive in its effect on an industry which was expanding in any case for purely economic reasons. But this Bill is in the tradition of the I.D.A.C., of the war-time controls of the Ministry of Supply, and in the tradition of the Forbes Committee. In other words, it is in the tradition of something which has worked.

I believe that, as time goes by, hon. Members on all sides of the House, and not merely on this side, will see that this Bill achieves the essential objective of Parliament. We are seeing misfortunes falling on other nationalised industries. The need is not to possess the ownership of these industries, but to see that we control them adequately and effectively through Parliament.

Mr. Jack Jones

The hon. Member has referred to interference with the conference system. I know that he would not want to say anything untruthful or anything detrimental to his own standing in the industry. Will he therefore give an instance where the Corporation prevented the conference doing anything that it set out to do?

Mr. Fraser

There were bound to be conflicts within the conference, because the interests of the Corporation were different from those of other sections of the industry. If the hon. Gentleman will study the percentages of control held in certain sections of the heavy industry, he will see that there was bound to be some conflict of interest between the Corporation and the smaller firms.

5.30 p.m.

Mr. G. R. Mitchison (Kettering)

I shall not follow the hon. Member for Stafford and Stone (Mr. H. Fraser) very far in what I can only describe as a downhill charge with a claymore, in the best Highland tradition. He was full of belief, but his knowledge seemed to be occasionally a little bit short of his belief, and his consistency might perhaps easily be criticised. It is always nice to see a good charge with a rather rusty claymore. I hope that the hon. Gentleman will take the compliment in the spirit in which it is offered.

This was a very bad Bill in form, apart from its substance, when it came before the Committee for discussion, and it was inevitable that alterations would be made in it. I shall not select all the bad points, but I should like to mention one or two because they illustrate what is wrong with the whole conception of the Bill. I shall not keep up this tea-party atmosphere at this stage. It ended by putting the dormouse into the teapot. The Minister had better take a turn in the teapot now. Let us have a look at what was wrong.

One of the first and most glaring omissions from the Bill was the almost complete failure to provide for trade union consultation at any relevant point. It was disguised by frequent references to "representative organisations." When we looked at "representative organisations" we discovered, to our surprise, that they did not include trade unions, but they did include Steel House. It only shows the extraordinary perversity of which the English language can be capable in the hands of Tory politicians. That was what it was, and it has been put right largely by altering the definition and so putting in trade union consultation at a whole number of points where it ought to have been when the Bill came before the House in the first instance. I cannot think how or why the Government managed to omit it.

Next, there was one other almost equally startling omission. We have been told quite rightly by the Parliamentary Secretary today that it is impossible to consider the British iron and steel industry by itself, and that we must have regard to raw materials abroad, and to the iron and steel trade and the demand for iron and steel products in the rest of the world. The countries of Western Europe are using the iron and steel and the coal industries as the kernel, the very centre, of an experiment of the most momentous importance. It is impossible to exaggerate the importance of what is happening in connection with the Schuman Plan, and not merely the Schuman Plan itself. It is impossible, of course, to consider the British iron and steel industry without having some sort of relation to that.

Here was a Board to be set up with powers that I shall mention in a minute. The whole organisation was to meet the very real need to settle the relations between the State and this overwhelmingly important industry; and not a word was in it about what the Minister or the Board or anyone else was to do with regard to the iron and steel industry in the rest of the world, and particularly with regard to the institution set up under the Schuman Plan.

On both those points we called the attention of the Government to most glaring deficiencies in the original Bill. I do not think a responsible Government ought to do that sort of thing, but I think I can guess why the two omissions were there. The Bill may have been cradled, delicately dandled and handled by the Minister and the Parliamentary Secretary in this House, but it was born from the womb of Steel House and it is going back to Mamma very shortly. I believe that was the significant reason for both those omissions. Steel House did not think it necessary to put in anything about trade union consultation. They said: "We will leave it out. Perhaps those Labour lads in the House of Commons will put it in where they want it." They did not think——

Mr. Robson Brown (Esher)

I do not think that the hon. and learned Gentleman really means the ungenerous remarks that he is now making. The whole basis of the Federation and of the associations of the Federation has been the closest working at all times and at all levels with the appropriate trade unions. It is a basic part of the iron and steel industry of which we are more proud than anyone.

Mr. Mitchison

That does more credit to the hon. Gentleman's kind, warm heart than to the facts of the case. The fact is that trade union consultation was entirely omitted from the Bill for all practical purposes and at all relevant points. It has been put in by an alteration of the definition. I leave it to the hon. Gentleman and to his right hon. Friend the Minister sitting below him to fight it out between them. If I am wrong in imputing it to Steel House, it rests upon the Tory Government. Let them settle it as they will, one way or the other; the Bill ought not to have been brought before the House with the almost complete absence of trade union consultation from it.

As regards the Schuman Plan, I do not think that Steel House are at all anxious that their relations with the iron and steel industry in the rest of Europe, or what have been their relations, should be discussed too much in this House or stated too clearly in the Bill. I quite recognise that. I believe that was the reason for those two very significant omissions at an early stage. If it was not, no doubt someone will tell me the real reason in both cases.

I am going a little bit further, if I may. Let us see what has been done in the Bill and what has not been done. I shall not go through the Bill in detail. I agree that there have been very considerable improvements, due, in the main, as the right hon. Gentleman the Minister of Supply would himself admit, to suggestions from this side of the House. Let us see the very important things that have been refused, and steadfastly refused, even within the limited framework of the Bill. The hon. Member for Stafford and Stone was talking about supervision and control. He corrected himself in the middle of his speech, but the peroration was about control. He forgot to correct that. Control is exactly what the Government have consistently refused to give to the Board in any general sense. They have given them certain limited and carefully-restricted powers, but given them no general control over the industry, not a word.

We were told, quite rightly, by the hon. Member for Stafford and Stone that all this is in the spirit of the I.D.A.C. and the war-time control of the industry. Of course it is. The I.D.A.C. was notoriously Steel House in other clothes, and so to a very considerable extent was the war-time control of the industry. That is exactly what the Bill is. Steel House are not going to give a board, which will not come from Steel House and will not be authenticated and supported at Steel House, any control over the industry. Supervision, I agree is given, and no doubt a power, obtained I must say by pressure from this side of the House, to prepare a report from time to time instead of a comprehensive plan for the industry.

Mr. Peter Roberts (Sheffield, Heeley)

We want to get this point quite clear about control. In talking about Steel House, the hon. and learned Member must be aware that the number of members on the Board is very much wider than any representation of Steel House would give. There is a great deal of control in the Bill. Just because one did not accept an Amendment dealing with the word "control" in the wrong place and at the wrong time, does not mean that there is not a great deal of control in the Bill.

Mr. Mitchison

I am much obliged to the hon. Gentleman. His first point was the point that I was making. It is just because the Board will not be Steel House and because it is intended to have other opinions that power of general control—I carefully used the words "general control" and excepted the measure of special control in the Bill—is so sternly and persistently refused. That is the point, and I am very glad that the hon. Gentleman has seen it. Here we have a body which is to have certain limited powers. Any suggestion that it should do more than act in an advisory and supporting capacity as regards the industry as a whole is sternly and stoutly resisted by the right hon. Gentleman who, on minor points, shows himself to be most helpful and accommodating.

Let us see what else happens. We get into one immediate difficulty with a Board of this character. It is a difficulty which we always get into if we try to put into practice the Tory idea of a Government which is going to represent the public interest and yet is not to have any powers of ownership. That is the difficulty which one is always faced with when one tries to make that idea work with a powerful industry which, by virtue of ownership, has the right to say, "We shall or we shall not spend our money in this way or that way."

The difficulty arises in two ways. First of all, can one say to the private steel owner, "You shall spend your money here"? and, secondly, can one say to him, "You shall not stop using that factory or that particular works"? I fully recognise that that is an inevitable difficulty if once one tries to make the Government fully representative of the national interest in an industry of this kind without giving them any power of ownership. It is because of that inevitable difficulty that the right hon. Gentleman and his hon. Friends were unable to accept two types of proposal in connection with this Bill. One was that except in a very limited field there should be some power to prevent stoppages and large closures of works in the interests of full employment, and the other was that the Government or the Board should have an effective directive power over the development of the industry.

Both those proposals have inevitably to be refused when one has to apply a concept of the highly limited kind which this Bill represents. We are asked, "What is the advantage of nationalisation?" It lies in just that type of point. I want to make perfectly clear to hon. Members opposite exactly what I mean. In an industry of large units, such as the iron and steel industry, the question whether it is to be in public or in private ownership is not likely to have any very large effect on the day-to-day management of the units in the industry. It does not make them any better or worse one way or the other. I should certainly not claim that under our own Measure of nationalisation there was any large change in ordinary management. There were cases, but they were not of vital importance.

Similarly, the question whether the industry under these arrangements goes on working better or worse from the management point of view will depend on considerations far greater than anything contained in this Bill. It will depend on happenings not only in this country but in the world. The thing that does make a difference is the inherent power of this industry. I have always regarded the nationalisation or de-nationalisation of iron and steel primarily to be a question of who is to have the immensely important power of leadership and the active and positive control of this industry.

This Bill contains all kinds of provisions, some of them rather complicated and some of them going a little way here and a little way there, but it neither sets up an instrument nor gives any powers to the Minister, the Board, the Agency or anybody else to exercise a positive and effective control. The iron and steel masters, represented in Steel House, will be the substantial masters of this industry when this Bill is passed. They will decide what works will be extended and what will be closed. The Minister will have some voice in the national interest, but it is bound to be a feeble voice, because this Bill came into being among these iron and steel masters. It is their child. They represent the industry as it used to be and as they hope it will be in the future. They will take directions, but in the long run they will have the last word.

What is their history? It is a history not only of using their power and influence in such a way as to allow or cause wholesale unemployment, as they did in those years of which the hon. Member for Stafford and Stone appeared to be proud, but also a history of singular failure to recognise what was the right or the wrong line of development. They have not such a good history as they sometimes think. From a social point of view, they have a thoroughly bad one, and I regard this Bill as a retrograde step because it effectively returns power to the hands of those people.

Let us look at their more recent history. We are told that they did not like Mr. Hardie's face. That was the explanation produced by somebody a short time ago for their remarkable action under the last Government. But it was not really Mr. Hardie's face that they did not like; it was the face of political democracy in this country, which is a much more serious matter. They defied the Government of the day and by doing so they defied our democratic institutions. They did it so successfully, with the help of the party opposite, that for some years they succeeded in staving off what they regarded as a disaster, until the turn of the tide and a rather remarkable electoral coincidence just sufficed to bring hon. Gentlemen opposite back to the place where they now are.

The steel masters brought it off, and they are the people to whom this power is to be handed back. I have no particular dislike for them. I am sure they mean well. Many people do, but among other things democracy is a means of dealing effectively with tyrants and oligarchs, who may mean well but who, none the less, are neither democrats nor people acting in the spirit of this modern world.

Those people want to keep this power, but the tide is against them both here and in the rest of the world, just as it is against the party opposite, and I entertain no more hope of a permanent settlement on the lines of this Bill than any sensible person ever entertained any hope of the tide turning because King Canute sat at the side of it.

In the interests of democracy, in the interests of our relations with other countries and the vital changes that are going on in Europe now, and in the interests of the men who work in this industry, who know quite well what they want—and it is not this Bill—I hope against hope that the House will repent and reject it on Third Reading.

5.50 p.m.

Mr. Eric Johnson (Manchester, Blackley)

I welcome this opportunity to say a few words on the Bill, and I should like, if I may, to take a look at it in the light in which I feel it may be regarded by some of the industry's customers. There is a well-known saying that the customer is always right, and I believe that the voice of the customer, the opinion of some of the steel industry's customers, should be heard. Indeed. I will go as far as to say that it may well be that they are the best judges of the merits of the Bill.

The opinions of the steel industry are, I believe, well expressed both in the House and outside. We have also heard the views of those who approach the matter rather more from the political angle and whose opinions are no doubt honestly put forward in the belief that the course which they advocate, whether they are in favour of the Bill or against it, is in the best interests of the country.

But the voice of the customer has barely been heard. I have no doubt whatever that, as a whole the consumers of steel will welcome the Bill. Surely this is a Measure which, if fully implemented, should result in more, better and cheaper supplies of their raw materials, whether it be semi-finished steel in the form of billets and slabs to re-rollers, or plates, or more finished articles like nuts or bolts or tubes. I think the customers will most decidedly welcome Clauses 3 and 5, which deal with the supervision of the steel industry by the new Board and with the powers given to the Minister in regard to production, if the Board report to him that further production facilities are required.

In one important respect, I think, this approval of the Bill is to some extent qualified. If I understand its purposes correctly, the Bill depends for its success on a strong Board and a Minister who will not hesitate to use his powers. I am sure that the consumers will be perfectly happy about the latter requirement while my right hon. Friend occupies his present position, but I urge him to appoint a really strong Board. The steel industry's customers would not want a Board which, rightly or wrongly, they felt was dominated by the Iron and Steel Federation and its staff, but in saying that I want to make it perfectly clear that I am not in any way questioning the integrity or the efficiency of the steel industry, nor am I finding fault with a system under which one firm may control all the processes, from the blast furnace right down to the finished article.

But there is a saying that charity begins at home, and although the consumers will have nothing to fear when there is an abundance of steel, I am bound to say that they have a feeling that the steel industry will naturally look after what pays it best or what suits it best and that those who come in at half way, so to speak, and whose raw material consists of semi-finished steel, might be the first to suffer in time of shortages.

We are constantly reading in the Press that production records are being broken by the steel industry almost month by month. That is a very fine achievement of which the industry is rightly proud. It has made a great contribution to our export trade, and those who work in the steel industry, in management or at the furnaces or in the mills, have earned the gratitude of the nation. But that does not mean that there is no shortage of some types of steel, for its present distribution, under nationalisation, leaves a good deal to be desired, and I hope that the freeing of the industry will put this right. Surely distribution ought to be in such a form that full attention is paid to the economic loading of efficient and modern plants.

Mr. Jack Jones

The hon. Gentleman says that the present system of distribution leaves much to be desired. Is he not aware that, although the Steel Corporation are responsible for production and for these very high figures of production, the Minister himself is responsible for fair and equitable distribution?

Mr. Johnson

That may well be, but distribution certainly leaves a great deal to be desired, and the Minister would not be placed in his present position were it not for nationalisation. I hope that what I have said may help the hon. Member for Rotherham (Mr. Jack Jones) to see why the Bill is necessary.

It is not in the national interest that modern and bang up-to-date plant should be on short time while other plant, which is of old design and very costly to operate, is working full-time on the production of similar articles. The principle of weight for age is all very well in allotting weight to racehorses, but it is a most unsuitable way to allot steel. Yet I can assure hon. Members that that sort of thing is going on at present under nationalisation, and the effect is to increase the cost to the customer and to make it more difficult for us to compete in the export markets

Nor do I think it is in the national interest that such modernised and efficient plants should be increasingly dependent on imports for their raw materials, as they are today. It seems almost unbelievable that when it is loudly proclaimed—and hon. and right hon. Gentlemen opposite sometimes take credit for this—that the annual output of steel has been increased by over 5 million tons a year compared with before the war, it is nonetheless a fact that since nationalisation some firms have been getting less British steel than they got before the war or before nationalisation. Again, it cannot be right that firms should be compelled to use a much more expensive type of steel, which is not needed to meet their specifications, because they cannot get the proper quality. Is this one of the alleged benefits of nationalisation?

Mr. Jack Jones

The hon. Gentleman says that some firms are getting less steel than they got before nationalisation. As 2 million tons more are being produced, the logic of that argument is that some firms must be getting a great deal more [Interruption.] I am addressing my remarks to the House, and if the hon. Member for Kidderminster (Mr. Nabarro) would wait his turn and not be rude, which is his wont, we should get on better. He may be extremely good at kidding the Minister, but if the people of Kidderminster knew how he failed to kid me it would be much better for them.

The position is that certain firms may be getting less British-produced steel, but we are now producing nearly 18 million tons a year, so presumably some firms are getting more British steel. Only four or five days ago I stood at this Box and asked that an Amendment should be inserted into the Bill——

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I think the hon. Member for Rotherham (Mr. Jack Jones) has already made one speech on Third Reading. He cannot make another.

Mr. Jones

The hon. Member for Blackley (Mr. E. Johnson) has given way.

Mr. Deputy-Speaker

I dare say he has given way, but the hon. Member for Rotherham is interrupting at great length.

Mr. Jones

I do not want to go on for too long. Finally, when we moved this Amendment on distribution, the hon. Member for Blackley went into the Lobby and voted against it.

Mr. Johnson

I well recollect the hon. Gentleman's Amendment, and I also remember a few remarks which I ventured to make at the time. I asked the Minister to give the assurance that distribution was covered by the word "supply" and, on receiving that assurance, I voted against the Amendment. I hope that one of the results of the Bill will be better supplies of steel in the sense that the steel is not only made but is supplied— and it is not supplied, hon. Members should bear in mind, until the customer gets it into his works. That has been happening to a less degree since the industry was nationalised.

It may be that the price structure as a whole is long overdue for revision. As to that, I do not know. What I do know is that one of the most certain ways of causing a shortage of supplies is by unremunerative prices—and we cannot say that the steel makers are to blame for that, because nationalisation has done absolutely nothing to improve matters. On the contrary, I have the strongest evidence to suggest that things have got worse since the take over. That is a state of affairs that, I hope, will be put right by this Bill. The machinery is there, if it is allowed to work, and the absolutely essential part of the machinery is a strong Board.

I believe that this Bill combines the advantages, as has been said so often, of competitive enterprise with supervision in the best interests of the country. The machinery of supervision may be stronger than some of my hon. Friends on this side of the House may think desirable. On the other hand, the Bill may allow greater freedom to the steel industry than some hon. and right hon. Gentlemen opposite think is wise. What must be avoided, and what, I hope, will be avoided what must be avoided if the industry is to flourish—is the awful cycle of nationalisaton, de-nationalisation and re-nationalisation.

I believe—and I say this in all sincerity, and knowing more of the viewpoint of the customers of the steel makers than that of the steel makers themselves or of the political point of view—that my right hon. Friend has achieved a compromise that can be honourably accepted on both sides of the House. I am sure that the steel industry will loyally put up with any restrictions on its absolute freedom that, I feel, a strong Board really can impose. Though I suppose it is in vain to do so, I do appeal to hon. and right hon. Gentlemen opposite to trust the Minister and to trust the industry, and to think again about dividing against the Bill.

6.2 p.m.

Mr. Frederick Mulley (Sheffield, Park)

I think that the House will regret that we did not hear more from the hon. Member for Blackley (Mr. E. Johnson) during the Committee and Report stages. We on this side share his desire to have a stronger Board, and we took great care to do what we could to see that the Minister had stronger powers. I think that if the hon. Gentleman had lent his voice, and his vote in the Lobby, in our support when we attempted to obtain exactly the things he wants, it would have been an even better Bill from his point of view and a less bad one from ours.

The Minister must be a little dissatisfied with the back bench support he has had so far today. No hon. Member has given the Bill an unmixed blessing, and it may be that as we go on we shall hear other criticisms from hon. Gentlemen opposite. It will be interesting to see whether any hon. Gentleman opposite disagrees with the hon. Member for Blackley by saying that the Board have powers that are too strong and that the Minister may exercise too strong an influence over the industry. That is the kind of difficulty in which hon. Gentlemen opposite find themselves when they abandon their principles and try to present a facade and a compromise to hoodwink the House and the nation.

The Minister has, I think we on this side readily concede, met us on this side with a good deal of co-operation. He has made a number of gestures to meet points of view we have put forward, but I am sorry to say that he has done so only on the minor points we have raised in criticism of the Bill Perhaps I could put the matter shortly, without wishing to appear offensive to the Minister, by saying that we could have surrendered more readily to his embraces if, more often, his bouquets had been of roses rather than of the faded cabbage leaves of which so often they were, when he put forward alternatives to his proposals to avoid our voting against them.

I think that some of the speeches opposite have been in favour of rejecting the Bill. Hon. Members opposite have spoken about the magnificent record of the steel industry in extending its production—a point in which I readily concur—but they forgot to say that this was reached in years since the industry has been nationalised. There has been talk about taking the industry out of politics, but hon. and right hon. Gentlemen opposite must take the responsibility for putting the industry back into politics during the last three years. Two General Elections were fought, in 1950 and 1951, with this as an issue, because hon. and right hon. Gentlemen opposite wanted to make it an issue.

For our part, we were quite content, having had the country's view once expressed—in 1945—that the industry should be nationalised, to leave it so, and if hon. and right hon Gentlemen opposite had left it at that we should not have had the steel industry and industrial matters made into political questions as they have been since 1949.

Mr. J. E. S. Simon (Middlesbrough, West)

If the hon. Gentleman really thinks that there was a mandate in 1945 to nationalise the industry in 1949, why does he think there was so much hesitation in the Socialist Government about taking that step?

Mr. Deputy-Speaker

Before the hon. Gentleman the Member for Sheffield. Park (Mr. Mulley) resumes, I would remind the House that the debate on Third Reading must be confined to what is in the Bill.

Mr. Mulley

I am very grateful to you, Mr. Deputy-Speaker, although I should have preferred to have answered the hon. and learned Gentleman opposite, because a good answer is available. However, I shall not trespass on your indulgence by doing so, because I realise we have gone rather wide in getting to the Battle of the Somme already.

I want to refer to the record of the steel industry and to say that we on this side of the House wish that it were even better, because the economic situation of the country demands that there should be even more steel available, because our main economic problems of exports, the defence programme, and further investment for our industries, all throw the ball back to the feet of the steel industry. If we are to achieve the economic solvency that hon. Members on both sides of the House desire we must have about 25 million tons of steel within the next 10 years, and one of the criticisms I have of the Bill is that it does not help, but hinders, the achievement of that basic objective that the steel industry ought to have. Indeed, it has been only in the last year that the rate of progress of the steel industry has been abated, and the Minister must take some responsibility for that because that has been due to the uncertainty in the industry as to its fate. because, as I was saying, hon. and right hon. Gentlemen opposite brought it back into politics.

Personally, I do not think that the rate of expansion will be maintained in private hands at the rate at which it would have been maintained had this Bill not been produced, because I cannot see where private industry can obtain the capital both to buy the industry back and also to finance the rate of progress that the national economy demands. In particular, of course, in the short run the steel industry ought to eat a good deal of its own steel. That is the only way, in my view, that we shall get the capacity to provide steel for export, and also for the investment in other industries that we so badly need.

What this Bill does is not to create the circumstances in which the industry can build itself up, but to focus the emphasis on dividing up the spoils. The steel industry is to concern itself in the next year or two years, or even longer, more with the prices at which undertakings can be bought than with the amount of steel that those undertakings can produce, and that at the present time is a very wrong preoccupation for the industry to have.

A further criticism that we on this side make is that the Board that will be set up under the Bill is nothing more than a facade. The Minister spoke, when he addressed the House on the White Paper, about the facade and reality of nationalisation, but no matter what his views may be of the facade or reality of the Board under the 1949 Act, there can be very little doubt that the proposed Board is an absolute facade to try to give an air of respectability to the steel industry. Every time we on this side have sought to increase their powers and extend their range of operations we have been resisted.

The most surprising thing, as the Minister has told us, is that he does not want the Board to act in the public interest. This is in direct contradiction of the speech of his Parliamentary Secretary this afternoon, and of the speeches of many hon. Members opposite who do not realise that it is not the Minister's desire that the Board should act in the public interest. This is against the recommendations of the Import Duties Advisory Board which reported in 1937, but the Minister has gone on record as saying that, and hon. Members opposite have twice rejected the suggestion of our side that the Board should act in the public interest.

The Minister of Supply (Mr. Duncan Sandys)

Would the hon. Gentleman read out the quotation in which I am supposed to have said that I was anxious that the Board should act contrary to the public interest?

Mr. Mulley

I think, with great respect, that the Minister has misunderstood what I said. He did not say that he wanted the Board to act contrary to the public interest; he said that he did not want them to act in the public interest. [HON. MEMBERS: "Read the quotation."] I have not got the quotation here.

Mr. Nabarro

Then withdraw.

Mr. Mulley

If the hon. Member would contain himself and read HANSARD, he would see that many hon. Members opposite voted against the Amendment to insert these words.

Mr. Nabarro

Surely the controversy, as. I have said right through every stage of this Bill, ranged around what is the correct interpretation of the words, "in the public interest," which is a very disingenuous phrase at the best. Perhaps the hon. Member will tell us exactly what he means by "in the public interest," and exactly when my right hon. Friend said that he would act contrary thereto?

Mr. Mulley

The hon. Member is trying to explain away his vote. The answer is quite clear. The reason why we on this side thought that the Board would act in the public interest—and the Board is not our creature, but the creature of the benches opposite—was because, in every statement up to the time of the introduction of the Bill, hon. Members opposite said that that was their intention.

In every debate on the steel industry back to before 1949, spokesmen opposite said that they would like to see a Board to safeguard the public interest, and quoted documents from the T.U.C. and other sources. If the hon. Member for Kidderminster (Mr. Nabarro) will refresh his memory of the Import Duties Advisory Committee Report for 1937, he will see that they recommended that the Board should act in the public interest, and that Report goes on at some length to indicate what they consider the public interest to be. I can do no better than to refer the hon. Member to a little homework in that direction.

Mr. P. Roberts

The words "national interest" appear frequently in the Bill itself. The hon. Gentleman will find them on the bottom of page 6. Is he suggesting that they do not appear in the Bill?

Mr. Mulley

I am only suggesting that the terms of reference made for the Board do not contain either a reference to the national interest or the public interest, and hon. Members opposite resisted our attempt to make them do so. At the same time, the same Clause has the quite meaningless and useless phrase, "competitive conditions," which had never been defined to my satisfaction by any hon. Member opposite. It is clear to me that it is much more important that the Board should attempt to operate in the public interest than under competitive conditions.

However, I do not want to prolong this point because I know that there are other hon. Members who wish to speak. I can only hope, because hon. Members opposite voted against putting in the term "public or national interest" as part of the Board's responsibility, that we shall hear fewer platitudes about the Board acting in the national interest than has been the case in many of the speeches made this afternoon. The fact is—and it may be a good argument—that the Minister said that it is the Government and this House who are the judges of the public interest.

As I understood him, he thought that the job of the Board was to act in the interests of the steel industry, and I do not accept the interests of the steel industry as being always identical with the interests of the nation. Neither do I accept the view that the interests of a privately-owned steel industry are the interests of the nation. The only unfortunate flaw in the Minister's argument that the Government and this House should exercise control over the Board in the public interest was that every time we wanted to give the Minister extra powers to do that he declined to have them. Every time we wanted to bring a question before the House in the form of an affirmative or negative Resolution it was resisted by hon. Members opposite. They tried to have it both ways. I think that it is a scandalous thing that we should have this facade of a Board. They are to give people the responsibility without the power, and they refuse to let them act as they would want to act, I have no doubt, in the public interest.

The second extremely unsatisfactory provision in the Bill is that with regard to the disposal of the assets. This has been fully discussed in Committee and on the Report stage, and I only want to underline the very unsatisfactory outcome of our attempts to improve the position. As hon. Members opposite know, they resisted in the Lobby all attempts to make the minimum price for the disposal of the assets the 1949 take-over price. That is quite a scandalous state of affairs, because if they will not make the 1949 take-over price the minimum, they must admit one of two things either that the 1949 prices were too high—and they must eat many of the words spoken at that time about expropriation and steel being spelt with an "a," instead of two "ee's," and all that kind of nonsense—or else they must have the intention of giving the industry back below the 1949 prices—below a fair and proper price.

Do not let any one be deluded by any argument about the fall in the value of money. Anyone who knows anything about economics, even the ordinary housewife, appreciates the point that when the value of money is falling, physical assets increase in value. Really, to be fair, we ought to make a condition that the 1949 price should be obtained as a minimum plus a percentage for the fall in the value of money since the date in 1948 when the 1949 valuation was made. As hon. Members opposite know, they refused to have that written into the Bill. I can tell them that we shall watch very closely the prices at which the various assets of the industry are sold. There is no argument, of course, that there has been a change in the value of industrial securities during the intervening years, because the "Financial Times" industrial equity index shows a higher rating by two or three points now over the 1948 point. So there is no argument there, and at least the 1948–49 valuation should be recovered by the State, plus, in many cases, a substantial addition for improvements effected under nationalisation.

The Financial Secretary made it fairly clear in Committee that the function of the Agency would be to dispose of the industry, even if it meant a loss. Recently, hon. Members opposite have been rather agitated about the taxpayers' money. We on this side are always concerned about the taxpayers' money, but recently there have been a number of speeches by hon. Members opposite about economies here and economies there. If they dispose of any of this industry at a price lower than the price that was paid they will be throwing away the taxpayers' money, about which they make such a song and dance. They can lose many more millions of pounds in implementing this Bill than they can get back by putting 2d. on the price of school meals, and other small economies announced by the Government.

My final point on the question of the disposal of the assets is this. It has been suggested-we on this side attempted to introduce an Amendment to stop it-that one way of disposing of the assets will be to dispose only of the equity shares; that the Agency, the nation in other words, will hold the preference and debenture shareholdings of the companies concerned. It has even been suggested in some quarters that to facilitate the sale the Agency should reconstitute the capital of the companies concerned so that it might be possible for private individuals to acquire the equity shareholding and the control of a company for perhaps as little as 10 per cent. of the actual value of the capital involved-nine-tenths of the capital being retained by the State in the form of debenture shares and the equity going for perhaps one-tenth, or even less, of the proper value of the undertaking.

That, quite clearly, would be a scandalous abuse of public money. It would mean that public money was being used to further private profit. The equity, the profitable side of the business, would pass, but the State would be left as a non-voting capital supplier for an industry which is meant to be flying under the flag of private enterprise.

If hon. Members opposite find that they cannot return the industry on proper terms, let them at least be frank about it in the national interests and in the interests of the taxpayer, and come along here and say, "We are having to keep these shares in public ownership because we cannot dispose of them." We will accept that explanation. But what we will not accept is that this Bill is a satisfactory substitute for the 1949 Act which it proposes to repeal.

We cannot accept the view that this organisation, this facade of a Board with ineffectual powers of public supervision and control, is sufficient for so vital an industry in the national economy. We have, however, noted with very great interest, as a result of this Bill, that it is the considered opinion of the party opposite that privately-owned industry cannot be trusted to operate in the public interest without supervision. That is a lesson which we have learned, and which I am sure we shall put to good use in a very short time.

6.24 p.m.

Mr. Peter Roberts (Sheffield, Heeley)

I am glad to have the opportunity of following the hon. Member for Sheffield, Park (Mr. Mulley). In this Third Reading debate it seems to be argued that because, at earlier stages, certain Amendments were rejected, for one reason or another. the Bill does not contain the principles behind them.

For instance, we have had the argument about the national interest. I merely point out that on page 6 of the Bill the words "national interest" appear twice. The hon. Gentleman seemed to be arguing that, because a suggestion that the words "national interest" should be inserted elsewhere was not accepted, the Minister does not expect the Board to act in the national interest. It has also been suggested that because the word "control" was not inserted in a certain place there is no control in the Bill. I only ask the House to look at Clause 8, which talks about the duty of producers to comply with the Board's determination of maximum prices. If that is not control I do not know what is.

Mr. Mulley

The hon. Member has referred to the fact that the words "public interest" and "national interest" are in the Bill. Surely any sensible person, trying to find the duties of the Board, would expect to find them in Clause 3, but there is no reference there to the public interest. In fact, an attempt to insert such a reference was voted down by the party opposite.

Mr. Roberts

There is no reason to deduce from that that neither the Board nor the Minister have not got to act in the national or public interest. That is the whole principle behind the Bill. If the party opposite are reduced to that type of argument, their defences must be very weak.

One thing I am glad that our discussions in Committee and on Report have brought out quite clearly—which I am sure most hon. Members appreciated, but which I do not think everybody in the country did—is that there are very different aspects to bulk steel and the special steels which come from Sheffield. I was very glad on one occasion to hear my right hon. Friend and the right hon. Member for Vauxhall (Mr. G. R. Strauss) agree that the special steels of Sheffield cannot he regimented and controlled in the same way as the great bulk steels. I do not want to labour that point further, because I think our debates have brought out the point very carefully and clearly.

I want to turn now to a remark made by the hon. Member for Rotherham (Mr. Jack Jones), who said that he had searched diligently to find the reasons against nationalisation and the reasons why we are introducing this Bill. I can only say that he cannot have searched very diligently, because there are three main principles which I have always maintained. When the hon. Member for Sheffield, Park suggests that we have no principles, or that we have run away from our principles, I can assure him he is entirely wrong.

The principles behind this Bill have been laid down for a great number of years. One of the first, a negative one, is with regard to nationalisation. We dislike and fear monopoly. [Laughter.] Hon. Members opposite may laugh, but that is my considered opinion. We fear the dangers of monopoly in the Act under which we are at present operating. Admittedly, the Board has not exercised its powers and the dangers have not been apparent so far, but the dangers are there, and one of the reasons I welcome the Bill is that it takes those dangers away.

The second principle is this. I believe most sincerely that to control or supervise an industry there is no need for the State to own that industry. Despite all the arguments to which I have listened from the party opposite about unemployment and the troubles which come to many industries at one time and another, it has never been shown how nationalisation in itself or of itself can avoid those troubles of unemployment and social upheaval. That has never been proved. What we wish to see, and what I believe hon. and right hon. Members opposite wish to see, is a form of supervision and control of industry, which can be obtained by the methods set out in this Bill without resorting to ownership of the industry itself.

Hon. Members who follow along the path of public ownership, the path that profit is a dangerous thing and that men must not work for profit, must, if they follow the path far enough, reach the logical Marxist conclusion of Communism. Quite frankly, one of the dangers that I see in the whole conception of public ownership is that it leads along the road to Communist control and ownership of the State and all the assets of the State. Of course, all forms of revolution start with the more kindlyminded gentlemen saying that they only want to go a certain way down the path, but they are the first to be swept away later. That is the danger which I see being taken away by this Bill.

Mr. Frederick Peart (Workington)

As the hon. Gentleman is making a general case against nationalisation, would he also apply that to the nationalisation of the coal industry and argue that the Conservative Government should denationalise the industry?

Mr. Roberts

No.

My second point is that we are trying to work out the experiment of the position between Government and industry. The Conservative Government started their experiment in the steel industry in 1932 or 1933. There may have been mistakes, and I am not suggesting that the record of that period was perfect. That was an experiment by the Conservative Party to control the industry by a Board. Not only did the Labour Government of 1945 nationalise the coal and gas industries, but they eventually nationalised the steel industry, thereby cutting short the experiment of control by supervision. What we are now doing is to revert to that experiment.

I believe that the experiment of nationalisation of the coal industry should go on, to see how it works. But why not allow the two experiments to go on side by side in order to prove which is the better? The trouble is that hon. Members opposite do not want to revert to the Conservative experiment because they are afraid that it will show up what is happening in the nationalised industries.

I come now to my third point, which is the benefits which derive from nationalisation and from supervision. Again, I would draw an analogy from the coal mining industry, of which I have some knowledge. I believe that a case was made out in the minds of the public, at any rate, that the mineworkers required greater and better benefits which they could only get through nationalisation. I think we have seen that the mineworkers have received great benefits from nationalisation.

Now I come to the question of the consumers. There are far more consumers of iron and steel than workers in coal and steel. There is no question that in the coal industry there has been benefit for one section of the community as opposed to the other section. But whereas I concede that there has been benefit to the organised workers of a nationalised industry, I believe that the resulting harm to the consumer through increased prices of the large monopolistic organisation set-up is detrimental to the economic welfare of the country and far outweighs the long-term benefit accruing to those in the industry.

I am speaking, of course, as one who comes from Sheffield and who meets a great many steel workers, and managers and others in the industry. I do not believe that the same view which actuated those In the coalmining industry regarding the benefits to be derived from nationalisation actuates a very great number of workers in the steel industry. Right hon. and hon. Members opposite have said what they propose to do with regard to this Bill if they get back into power. I believe that if the party opposite go before the public at the next General Election with the cry of re-nationalisation, they will hang themselves politically. From a political point of view, I would welcome their doing that, but from the point of view of the national interest I would rather not see them hang themselves in this way, but, instead, accept the compromise which this Bill represents. I put the national interest before the political interest.

Mr. Mulley

Are we to infer from the hon. Gentleman's remarks that he thinks the national interest is best served when we on this side are the Government?

Mr. Roberts

Nothing that I said or intended to say could possibly mean that.

I am convinced that this line of general national supervision by the Government through boards is going to be necessary for the great industries of this country which, in themselves, can affect the whole social outlook of a town or locality. That is why the steel industry comes under this supervision rather than the smaller industries which cannot affect the social structure of this country.

I hope that the Government will press on with the principles underlying this Bill, because I believe that when it becomes an Act it will prove to be workable and effective, and I am satisfied that it will remain on the Statute Book for a long time to come.

6.38 p.m.

Mr. W. T. Williams (Hammersmith, South)

I count myself privileged to follow the hon. Member for Heeley (Mr. P. Roberts) because, like him, I wish to speak not so much on the details of the Bill as on what might be called its underlying principles and my reaction to them. The hon. Member for Heeley said he welcomed the Bill because he thought it socially desirable and because it represents a continuation of an experiment instituted by his party. He spoke of his dislike and fear of monopoly and said that was one of the things that inspired the Government to carry on this particular experiment because it was inter alia breaking down monopoly.

I would point out, in passing, that there is an Act already in force which would have enabled the Government, had they been sincere in their views, to have done a great deal about many other monopolies a long time ago. The hon. Gentleman spoke about the danger of Government monopolies resulting in Communism. He said that it inevitably followed that people of good will who wanted to put large powers into the hands of Government for desirable social ends would be superseded in due course by tougher and rougher politicians who would take over where they left off and would immediately plunge us into a totalitarian State. My opposition to the Bill is precisely for the reasons that he has given in support of it.

This Bill is socially undesirable and will have socially evil results. I suppose I am doctrinaire in the sense that I hold as a doctrine that the business of a Government is to attempt to achieve a just society. It follows that before one can have a just society one must have a society of equal opportunity. It follows, too, that one cannot have or hope to have a just or an equal society as long as men and Governments seek to create a system of society in which, not the real need of the people, but the private profit of the few is the first consideration.

If we are to build up a society in which men will work not for their own profit but for the common good and for the national welfare, the great basic industries of the nation at least should be in public hands. I am not, however, doctrinaire in the sense that I believe in nationalisation for its own sake. I recognise quite well that nationalisation may be, at its best, for many people nothing more than just a change of boss and, at its worst, it may put into the hands of the Government of the day tremendous economic power which can be used for evil ends. I recognise that nationalisation itself may be amoral. In some circumstances, there are more effective ways of public control and ownership than nationalisation. If, however, the test, for nationalisation or private enterprise, be the public good, the danger of totalitarianism of which the hon. Member for Heeley spoke and to which I have referred can be avoided.

My view about this Bill is that it is a bad Bill because it has been introduced to achieve ends that are a discredit to the Government who have introduced it. This Bill, by the test of public good, is a retrograde measure. It has been brought in for reasons that reflect no credit upon the Minister or the Government. It is a bad Measure because it has introduced again into politics the steel industry of the country.

I hope I am speaking without malice and without intolerance when I say that it does not lie in the mouths of hon. Members opposite to say that steel should now be taken out of politics. If we believe, as those of us on this side do believe, that the only effective way by which the tremendous economic power arid political potential of the ownership of this vast industry can be used for good and desirable ends is by putting the industry in the hands of a responsible democratically elected Government and not in the hands of the people who are responsible to nobody but God and history, it is not for hon. Members opposite, having taken the industry out of democratic control and put it back into the hands of a certain number of private owners, to say that the industry must be taken out of politics.

Sir Herbert Williams (Croydon, East)

Can the hon. Gentleman say what is now the democratic or Parliamentary control over any nationalised industry?

Mr. Williams

This is precisely the kind of thing that I was attempting to avoid. I have already said that I recognise that, at its worst, nationalisation could be entirely undemocratic and that of itself it was non-moral. On the other hand, as long as the State possesses the power of control and ownership and as long as the Government is a democratic Government, the kind of danger that will arise when nationalised industries are outside democratic Government control can be avoided. I think it is one of the weaknesses of the present nationalised setup. I have never failed to recognise that. But that does not deny the fact that as long as these great basic industries of the nation are in the hands of the people, there is real opportunity for them to come under democratic control. This is impossible under the set-up that is now being visualised.

It is intolerable that a great industry of this kind, that was tremendously successful under nationalisation, should be de-nationalised for purely doctrinaire and unworthy reasons and taken out of the control of the nation and put back into the control of a few private individuals. I believe that because this industry is so crucial for the creation of a just society, as it is crucial at this moment for our economy, the Government are doubly culpable in that they are once more putting it into suspense. It cannot be allowed to remain in this condition. Those of us who believe that it is essential that the industry should be under public control cannot now call it a day with the Government who are now putting the industry back into suspense. The danger of such continuing suspense is that the industry will be strangulated.

This is a bad Bill because, in spite of everything that has been said by hon. Members opposite, it does nothing for the industry. There is nothing in the Bill that will increase or alter in the slightest degree the steel producing capacity of this industry. The only thing the Bill does is to restore the industry to the people who want to make a profit out of it. [An HON. MEMBER: "It is making a profit."] The industry is now making a profit—and it is making a profit now for the first time—[HON. MEMBERS: "Nonsense."] At least, this industry began to make a profit when it came under Government control. In the years before the war it was rapidly running down hill, and the people who were in control of it had nothing for which they could congratulate themselves.

Mr. Summers

The hon. Gentleman has just asserted that the industry was rapidly going down hill before the war. Will he look at the facts in order to verify what I say, namely, that after the formation of the Federation and the Import Duties Advisory Committee, then and then only was the industry able, because of its position, to raise equity capital which was not possible before?

Mr. Williams

Hon. Members opposite are claiming credit for an industry which runs to the Government for help when it is in difficulty, and which has now under Government control, without such artificial fiscal aids, become a success. Indeed, it got into a mess before very largely because it tolerated, in the interests of the profits of the few, the obsolescent machinery with which the industry was being held together.

Permit me to return to the real subject of my speech. If the Government had wished sincerely to serve the community, they could have achieved all the supervision, and even the decentralisation and control that they declare they want without sacrificing the national interest to the profit of the few. The Government could have introduced a Bill, if they had really wanted to do so, which would have avoided all the difficulties about which they complain in the present nationalised set-up, the relic of the Labour Government.

They could have done so by introducing a Bill which could have decentralised the industry and which could have given a separate Board with supervising, controlling powers, without doing the only thing this Bill does—to take the industry with its present profit-making capacity out of the hands of the nation to whose advantage it would have been to remain, and give it into the hands of private individuals.

It is the real proof of the insincerity of the Bill that it sets up a Board which has all the appearance of power but which is in reality impotent, and which has made a facade of serving the public interest when we all know that the only thing it has done is to sell the national assets to a few steel barons. [HON. MEMBERS: "Oh!") I know the phrase "steel barons" causes an immediate reaction on the part of the Government benches, because I have used it before.

It has done this particular thing in this particular way, which is again one of the indictments I have to make of the Bill. What are the only possible effects of it? It can only either put the industry into the hands of financiers, who do not of themselves know anything about it, who are interested in the industry only in so far as it makes profits, or put it back into the hands of the people in whose hands it was before the war.

In either case the result will be bad. Neither of those groups will tolerate control. Whatever may be the facade of this Bill, neither of those groups will encourage competition. Both will encourage monopoly because they have always done so. Neither of them will permit the industry to advance or improve except on the terms that its income will thereby increasingly grow. It is a vested interest that, before the war, took a vested interest in obsolescence.

I fear the consequences of this Bill not only for its own sake but because of the evidence it provides of the abdication by the Government of their interest in their duty, which is to seek the true welfare of the community and to build up a just society. As far as this industry is concerned, I believe that the workers and the managements will do the best they can to make the industry work. The tragedy of it in my eyes lies in the fact that the attitude of the Government reveals to the great industries of our nation that they now propose to sacrifice their well-being to the profit-making ability of people whose history compels fear rather than confidence.

Mr. R. Jennings (Sheffield, Hallam)

Does the hon. Gentleman mean to suggest that if any of the workers or executives read the speech he has just made, it will compel the best from them?

Mr. Williams

As far as the workers and the executives are concerned, I have nothing to fear. My criticism has been of the Government for introducing this Bill at this time for so little reason and with what I believe will be evil results.

6.54 p.m.

Mr. J. E. S. Simon (Middlesbrough, West)

I am sure that the hon. Gentleman will forgive me if I do not follow him immediately into the fascinating philosophy of wicked steel barons, because I should like to start by congratulating my right hon. Friend on having produced now for Third Reading a Bill which represents a constructive view and a constructive approach to a basic 20th century industry which is, I believe, in the real Conservative tradition of liberty under the law and reconciling freedom and authority.

Mr. C. R. Hobson (Keighley)

What about Richard Thomas?

Mr. Simon

I am sure I speak also for back benchers on both sides of the House if I pay tribute to the leadership we have had in our debates from my right hon. Friend and the Parliamentary Secretary, on the one hand, and from the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) and the hon. Member for Rotherham (Mr. Jack Jones), on the other, in a constructive approach throughout the Committee and Report stages of this Bill.

When we examine the run of the debates, there are certain fundamental considerations with which we all approach the problem of the iron and steel industry and if one draws the correct deductions from those, then this Bill represents a solution to the problems of the industry which the country generally can accept. We are all, are we not, primarily concerned with the efficiency of this industry? There has been great concern throughout with the welfare of its workers and there has been concern also with the effect of the stability of this industry on the economy of the country.

I do not know how far I carry hon. Gentlemen opposite with me when I say that there is a further consideration, namely, that we want to impose no more controls on the producers in the industry than is necessary to secure the paramountcy of the national interest. I know that there are certain hon. Gentlemen who argue that there cannot be that control without ownership, but for the reasons given by my hon. Friend the Member for Heeley (Mr. P. Roberts) I suggest that that is wrong. At any rate, our approach should be to see where are those strategic points at which we ought to exercise the control.

What the Bill seeks to do primarily is to harness the great creative effort which is available by harnessing the efforts of persons seeking to make a profit. If that is done under competitive conditions, one has linked directly their own profits with efficiency. That is recognised in a number of respects. I think hon. Gentlemen opposite would say that where those parts of the economy which they think fit are left to private enterprise, it is precisely because private enterprise has some inherent advantages which relate directly to the public benefit. Surely it is recognised also by a remarkable speech made by the right hon. and learned Gentleman the Member for St. Helens (Sir H. Shawcross) over the week-end. According to a report in "The Times" he said: There are industries which it would be folly to take into public ownership—those, for instance, which do a considerable foreign trade and on which our exports depend, those which are integrated with other industries abroad, those which, for instance, make large use of foreign patents, and those which are operating efficiently and to capacity already.…

Hon. Members

Steel.

Mr. Simon

Leaving aside these last, which, I suggest, would include steel, what does that mean except that where our industries have to face foreign competition—in other words, where their existence and survival depend on their efficiency—we cannot afford to nationalise? It is only where there are industries whose inefficiency we can mask by spreading the cost throughout the economy that we may contemplate nationalisation.

Mr. Hobson

The hon. and learned Gentleman would not say that in public.

Mr. Summers

This is public.

Mr. Arthur Palmer (Cleveland)

The hon. and learned Member has quoted from a speech of one of my right hon. Friends. It is an interesting quotation, but there is nothing particularly novel about it. We have always believed in private enterprise in a place where it can be properly enterprising.

Mr. Simon

I am grateful to the hon. Member. I only hope that he follows me also in the clear inference which. I suggest, is to be drawn from that speech.

There is another reason why one is entitled to say that competition has inherent advantages. We heard a great deal during the debates in Committee about Socialist competition; we heard it on Second Reading from the right hon. Member for Vauxhall who said that there was nothing to prevent competition among the component enterprises of a public industry. That, surely, is in itself suggesting that competition has some advantages, but, in fact, it is a completely misleading argument.

There is nothing to prevent the right hon. Gentleman standing on his head in the House of Commons as long as he does it outside the Bar of the House—and a very interesting gymnastic exercise it would no doubt be, although not, perhaps, more interesting than some of the mental gymnastics which we have had during the debate. The point is that although there is nothing to prevent it, it is an extremely unlikely thing to happen, because there is no possible incentive for it to do so. It is only if we provide an incentive that we get competition promoting efficiency.

Mr. Jack Jones

Next time that the hon. and learned Member visits his constituency, will be take the trouble to go unexpectedly inside one of the works? I assure him that he would see competition as between furnace and furnace within nationalisation, each trying to see who can get out the most production in order to earn the highest wage packet. This is happening every hour in the hon. and learned Member's own constituency.

Mr. Simon

I assure the hon. Member that I never go to my constituency for any extended period as much as a week without going into one of the enterprises. I had remarked that. All I say is that one wants not only the competitive spirit within the enterprise itself, but between enterprise and enterprise. [HON. MEMBERS: "It is there."] That cannot be done unless the profit of the producers, as well as the profit of the workers, is directly related to their efficiency.

Mr. Chetwynd

Would not the hon. and learned Member agree, in contradiction to all that he has said, that the healthy competition between Dorman, Long's, on the one hand, and Cargo Fleet Iron Company, on the other hand, for overseas orders acts in a very healthy manner as far as those two companies are concerned?

Mr. Simon

I think that so far the nationalisation of the industry has impinged very little on the industry. We have not really had time to judge. What one can do is to argue, first, upon general principles, and secondly, to argue from looking at the performance of other nationalised industries.

Mr. Julian Snow (Lichfield and Tamworth)

If we have not had time to judge, why denationalise?

Mr. Simon

Had the hon. Member been listening, he would have heard me say that we can only argue from general principles and from the example of other nationalised industries. It is because those arguments are so overwhelming that the Government are abundantly justified in bringing in the Bill.

That is the general reason for returning the industry to private enterprise. Nevertheless, one has to counter-balance against that the recognition that this industry is in a particular position. First, as the hon. Member for Islington, North (Mr. Fienburgh) pointed out in a most interesting speech on Second Reading, this is an industry which has a tendency to monopoly, and that is a fact that we must take into account. Secondly, it is a basic industry, which is another fact that we have to take into account. So far as the monopolistic tendency in the industry is concerned, that really arises from the fact that the tendency in modern industry, and particularly in modern industry of this type, is in accentuating the efficiency of the large-scale producer and the integrated producer, and for a great many reasons.

If we get a tendency towards monopoly, we must accept that that limits the amount of competition which can be found in the industry. The answer, surely, is not to sweep away all competition and to merge it in a vaster monopoly, but to recognise the defect of monopoly and to try to cure it by the minimum control possible. The defect of monopoly, I should have thought, put as an economist might put it, would be that the producer can control prices without being obliged to respond to the prices fixed in the market, or, as we as plainer men, perhaps, would put it, that one can make a profit without having to be efficient; that one's profit is not necessarily at the price of efficiency.

The answer to that is not to impose a greater monopoly but to have some external agency to fix the prices, so that, once again, the profit of the producer depends on his being marginally more efficient. Every increase in efficiency will mean an increase in profit, because his prices are fixed externally and he has to respond to them. That is exactly what the Bill does in its price-fixing Clauses.

The second feature of the industry which we must recognise is that it is a basic industry. That has two general repercussions. In the first place, the effect of fluctuations in investment in an industry of this sort is very much greater on the economy generally than fluctuations in the investment of a consumer industry. Secondly, there are strategic and social considerations, which were so well referred to by my hon. Friend the Member for Heeley, which have to be considered. It is in view of those matters that, as I understand, Clauses 5 and 6 of the Bill give to the Board and to the Minister, acting in the national interest, residual powers of development. If that is so, we have taken exactly the powers, and no more than the powers, that are necessary to mitigate and to take into account the considerations which arise from this being a basic industry.

What of the future? How can the Bill vouchsafe a permanent solution to the industry? None of us has any doubt as to the staunch patriotism of the right hon. Member for Vauxhall on the Opposition Front Bench. I have heard many speeches by the hon. Member for Rotherham since coming into the House, and I think we all admit that in that respect he is a shining example to any Member. I ask them to weigh carefully these considerations.

It must be bad for the industry to be constantly subject to political changes. I ask those two hon. Members to consider, secondly, whether the Government have not imposed a compromise solution.

Mr. Palmer

Not a compromise.

Mr. Simon

I ask them, thirdly, to consider whether it is proved beyond any doubt that nationalisation is really the answer, and the only answer, to the problems of a basic industry in the economy. I ask them to consider whether it may not be possible that the present solution—what I have suggested as the minimum of controls at the strategic points—may be an alternative answer.

I ask them to consider whether this scheme is not very similar to a scheme that was suggested by the Trades Union Congress. [HON. MEMBERS: "No."] I know the objection that hon. Members have to this argument, but I hope they will hear me out fairly. I ask the right hon. Gentleman and the hon. Member for Rotherham to say whether this scheme does not have certain very striking resemblances to the scheme suggested by the Trades Union Congress as suitable for a basic industry.

I know well that the Trades Union Congress have said in subsequent exegeses of that particular passage that they did not intend to apply it to the steel industry—and, of course, they are entitled to say what they intended by their words. But we equally are entitled to say that they have produced no argument whatever as to why it should not be suitable for the steel industry if it is suitable for some other basic industry.

Lastly, I would ask hon. Members to consider this also. We must all quite clearly have in mind the fact that the problem of the sale back of this industry to private hands must depend to a very great extent on the view that potential buyers form as to the political future of this industry. We have all in mind that we want to obtain the very best price we can. I say in all sincerity that there is nothing which can be done to improve that price more than for right hon. and hon. Members opposite to say, "Let ideologies go to the wind." [HON. MEMBERS: "Oh."] "Let us try this great experiment. Let us leave this industry to prove itself under its present organisation."

If that were done and if what has been called "the Strauss threat" were withdrawn, there is little doubt that countless hundreds of thousands of pounds would immediately accrue to the Treasury. Not having any doubt at all as to the patriotism of right hon. and hon. Members opposite, I ask them sincerely to weigh that argument also.

One of the main considerations which have to be borne in mind is the welfare of the workers in this industry. Surely we are all united in recognising that the welfare of the workers is bound hand in glove with the stability, the peace and prosperity of this industry.

7.12 p.m.

Mr. H. A. Marquand (Middlesbrough, East)

The hon. and learned Member for Middlesbrough, West (Mr. Simon) congratulated the Minister and the Parliamentary Secretary, and with that part of his speech I agreed. We all recognise the excellent performance of the right hon. Gentleman and the Parliamentary Secretary during the passage of this Bill. But when the hon. and learned Member went on to congratulate them on the Bill then, of course, I disagreed fundamentally and vehemently. I also disagreed with the rest of the hon. and learned Member's speech, and perhaps I may be permitted to say why.

My hon. Friend the Member for Rotherham (Mr. Jack Jones) said earlier that he was approached in his constituency at the weekend by representatives of the steelworkers who went so far as to suggest a token strike in protest against the Bill. That, of course, he turned down. In Middlesbrough this weekend no one came to me to suggest a token strike but wherever I went amongst steelworkers and others interested in political affairs I was asked, "Why is it that during the passage of this Bill through the House of Commons there has been such a calm atmosphere and such an absence of controversy? Why has the Bill not been more vehemently opposed?"

There is no doubt at all of what the majority of people in Middlesbrough feel about this Bill. I had to explain to them the nature of our procedure. Members of the public rarely hear or read about Committee stage debates because they are generally taken upstairs. They do not fully realise that when we debate matters in Committee we assume for the time being the principle of the Bill as having been adopted and in that stage try to improve the Bill. That we have tried to do, and we have been praised for it. I need say no more about that.

The Parliamentary Secretary, by implication at least, admitted that there were imperfections in the Bill when it was brought before us, that many have been removed and the Bill had been improved by that process by passage through Committee and Report stages. But, with all the minor imperfections removed, the fundamental objections to the Bill as a whole remain. It constitutes a completely unnecessary interference with an industry which is doing splendidly.

We cannot accept the argument of the hon. and learned Member for Middlesbrough, West that we should now accept this great, new, noble, experiment and watch it benevolently to see how it goes, whereas he and his right hon. and hon. Friends, long before the Steel Corporation had any chance fully to show what it could do, chose to break it to pieces and remove the opportunity for planning the industry. The Bill destroys the instrument—the Corporation—which was devised to operate a unitary yet flexible system of planning in the national interest. It involves a reckless gamble in the sale of national assets.

To argue that this is done in order to preserve competition is completely unacceptable. Under the system set up under the Act of 1949 it is true that the Corporation owned the shares of the undertakings concerned in the same way as many holding companies hold shares. But it interfered in nowise with their competitive activities one against the other, as my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) reminded the hon. and learned Member for Middlesbrough, West. There was room for competition, competition in efficiency and in the sale of products abroad between the separate companies. There was no interference with their management of their own concerns in an efficient and sensible way.

Instead of that flexible plan in the national interest, that system of sensible competition in efficiency still permitted to the firms we now see the set up of a cumbersome, bureaucratic, system of merely negative supervision. The Parliamentary Secretary said this afternoon—and I took a note of his words—that too much control leading to too much bureacracy would defeat the end he had in mind. But that is precisely what the Bill does. Instead of a unitary Corporation, it sets up four or five different sections of the industry.

It splits the unity of the industry to no purpose, as I said on Second Reading, and it remains true on Third Reading. When the Bill has finished with the industry it leaves different sections of firms bought back by private interests, of the Federation, of firms which have not been bought back by private interests, of the foundries and re-rollers which were not under the control of the Corporation before, of the Board, of the Agency—and, brooding over it all, the Minister unable to know to which of all these various interests he shall listen. There are four or five separate organisations in the steel industry instead of the simple form of organisation which was set up by the 1949 Act under which we had the Minister, the Corporation and the firms and nothing else.

To refer more particularly to what the hon. and learned Member for Middlesbrough, West said, the Bill provides no adequate safeguard against the abuses of monopoly. Under the previous Act, the Corporation was charged with the duty of supervising the industry in the public interest. Under this Bill, there is no adequate safeguard against monopoly.

The hon. and learned Member admitted in his speech today that there was a tendency towards monopoly in this industry. He admitted that in his Second Reading speech, but when he spoke then he suggested to his right hon. Friend that he should give to the new Board powers at present possessed by the Monopolies Commission. I ventured to bet him that his right hon. Friend would not do that. Of course my bet was quite safely made, and his right hon. Friend did not do it. He has not given to the Board the powers of the Monopolies Commission but has left in this Measure the almost meaningless Clause saying that the Monopolies Commission can be permitted, if so inclined, at some time or other, when the President of the Board of Trade thinks fit to refer the matter to them, if they have time, apart from all the other things on their plate, to have a look at what the industry is doing. The right hon. Gentleman rejected the suggestion that the Board itself in the public interest should watch any tendency to monopoly created by this Bill.

Mr. Simon

I am sure the right hon. Gentleman would not wish to mislead the House in any way. During the Committee stage the Parliamentary Secretary pointed out that the words "under competitive conditions" in Clause 3 gave the Board the express duty of supervising the industry with respect to monopoly.

Mr. Marquand

They still seem to me to be very vague phrases, not giving anything like sufficient power. It is true that there is the power of price control which does safeguard the consumer against certain monopolistic abuses, but I cannot see that the Bill effectively provides for the protection of the consumer against the other types of monopoly.

It still seems to me and to my hon. Friends that the Bill which began as a sham is ending as a sham, and we are certainly not prepared to watch it in a benevolent, if perhaps patriotic, spirit and wonder whether it might one day turn out to be not quite as bad as we thought. We regard it as a bad Bill, and we are as completely dis-satisfied with it at the end as we were at the beginning, and we shall certainly continue to say so.

7.21 p.m.

Mr. Spencer Summers (Aylesbury)

I hope the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand) is feeling better for the speech which he has just delivered. It seemed to me to be full of prejudice and political cant and quite unrelated to the facts of the situation. He spoke about monopolies, and seemed completely to have overlooked the fact that under the arrangements which his Government made the Monopolies Commission are precluded from doing anything in connection with the affairs of the nationalised industry.

Most of us have enjoyed the contributions of the hon. Member for Rotherham (Mr. Jack Jones) during the earlier stages of the Bill, but this 'afternoon he did himself less than justice in his speech. He said the motive for the introduction of the Bill was to enable people to feather their nests. Whether that had anything to do with the pheasants and crows about which he told us earlier I could not quite make out. What struck me was that that suggestion should be made and that directly afterwards he should be so naive as to relate a story about the National Savings Movement in which he told us that when he was asked why he supported the movement he replied, "So that when we return to power there will be plenty in the kitty." It is a strange reason to support the Savings Movement so that a Labour Government may have plenty of money in the kitty to get their clutches on; I should have thought that that was a very strange way for the hon. Gentleman to go about his business.

Mr. Jack Jones

I am sure the hon. Gentleman does not wish to mislead the House. I did not say that we wanted money in the kitty to get our clutches on. I ought to have finished the illustration. Our object in having money in the kitty is to finish the things which the Tories have left undone for so long.

Mr. Summers

People do not put money in the National Savings Movement in order to provide money in the kitty for the use of the Government; they put it there for thrift purposes, and for a rainy day.

The hon. Gentleman asked: Why the Bill? The right hon. Gentleman the Member for Middlesbrough, East echoed it in somewhat different terms. The hon. Gentleman lectured the Government Front Bench for having failed to give any justifiable reason for the introduction of the Bill. The hon. Gentleman based his case on two grounds. The first was that things were satisfactory as they were, that much good has accrued to the industry and the nation during the tenure of office of the Corporation and secondly that nobody could point to any damage which had been done during that period.

It is that claim that I want to examine. The hon. Gentleman implied, if he did not actually say so in so many words, that one of the advantages which had accrued to the industry and the nation during the tenure of office of the Corporation was the manifest increase in output. He must know from experience that the increased output during that period was derived from increased capacity and increased raw materials planned long before the Corporation had anything to do with the affairs of the industry. The hon. Gentleman says that it was thanks to the Corporation that steps were being taken to improve the raw materials supplies. I do not know what he has in mind, for I am not aware of any steps taken by the Corporation to that end, but I am aware of many steps taken by the industry itself to that end, and I am also aware of steps to that end which the previous Government refused to allow the industry to take. I know of no reason and no justification for saying that credit is due to the Corporation itself for any planning done in the raw materials fields.

The hon. Gentleman spoke about wages and alluded to his experience when negotiating, and implied that there would be much better chances of improved wages under nationalisation than there would be under the system about to come into force. I gather that what the hon. Gentleman had in mind was the belief that because some of the profit had been left in the industry, more would be available for wages. He had a lot to say about the profit motive.

Mr. Jack Jones

The hon. Gentleman seems to be getting into the habit of not listening, or, having listened, not keeping in mind what was said. I was pointing out the different opportunity which would arise as between workers in modern and efficient factories where production costs would be high and labour costs low and workers in a "crow" company—as against one in a "pheasant" company—where efficiency would be lower and profits lower and there would be less mechanisation and fewer chances of obtaining a good wage. As a result of nationalisation, profits can be taken from the rich and given to the poor; in those circumstances there can be equity in wages.

Mr. Summers

I am normally glad to give way to the hon. Member, but I shall not give way again if he proposes to use the opportunity to make another speech. I am aware of the point which he is anxious to stress, and I am also aware of the point from which he is trying to ride away, the fact that under nationalisation, in his view, the profits, instead of going to shareholders, are available for increased wages. What he has completely overlooked, and he ought not to have done so, is that precisely the same dividends have been paid to the Corporation by the companies during nationalisation; so it is false to argue that reduced dividends have enabled money to be set aside for increased wages.

As to ability to negotiate more satisfactorily under nationalisation, the hon. Gentleman has overlooked two very important considerations. First, he is basing what he says on the assumption that the most modern plant is necessarily the one that makes the biggest profit.

Mr. Jack Jones

Not necessarily.

Mr. Summers

The hon. Gentleman's whole case rested on the assumption that it is, and he must not ride away from that. If he knew as much as we expect him to know in this matter he would know that under post-war conditions that is certainly not the case. He also overlooked the fact that there are national wage agreements in the industry. It is not the case that each company negotiates its wages on the basis of the profits that it earns.

The hon. Gentleman was anxious that the Corporation should take the credit for many of the satisfactory changes which have occurred during the last few years. He really cannot claim credit in that way almost immediately after having accused the industry of sabotaging the Corporation and of being lacking in cooperation with it. The hon. Gentleman cannot have it both ways; he cannot criticise the industry for failing to cooperate and then say what a splendid state of affairs has come about through the action of the Corporation.

The hon. Gentleman said that no criticism has yet been advanced about damage done during the Corporation's tenure of office. I do not say that great damage has as yet been done. There has undoubtedly been a very marked fear of interference on the part of the Corporation with the day-to-day business of the companies, fear for the existence of which there is good reason. But the real danger is the plans which were known to be in the minds of the Corporation for completely changing the structure of the industry and greatly damaging its efficiency. The right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) looks at me with pained surprise. But he knows perfectly well what they were, and if the right hon. Gentleman has not read Mr. Hardie's book on the subject perhaps he will and so find confirmation of what I have said. What I am saying is that there were further new developments envisaged by the Corporation to make drastic changes in the structure of the industry which, in the view of those in the industry, were calculated greatly to damage its efficiency.

Mr. G. R. Strauss

I know nothing of the sort. I know the Corporation were about to consider and to discuss with the industry various plans of de-centralisation on a functional basis, but that had not got any further than the earliest form of discussion. I know that certainly nothing would have been done without the most careful discussion with the industry as a whole.

Mr. Summers

I notice that the right hon. Gentleman is not saying that it would not be done unless it were welcomed by the industry. He was at pains to avoid any such implication. He knows that the Corporation have been virtually an ineffective instrument, and the whole case of the Opposition is that the power to do things is indispensable to an effective Board of Corporation, and that if they think certain changes are necessary, whether the industry welcomes them or not, they will do it because that is what they are there to do.

It was because of these considerations that the industry rightly feared the consequences of giving a longer tenure of office to the Corporation under nationalisation. Fundamentally, why this Bill has been brought in is because of the damage which it was felt would be done to the industry by the prolonged existence of the Corporation, and it was decided that they had been there long enough and that they should be abolished before any more damage was done.

I greatly welcome the principle behind this Bill. That co-operation and partnership on strategic policy should be substituted for ownership and control by a State monopoly. I am satisfied that the powers inherent in the Bill are perfectly adequate for the Board to supervise the industry, and I think that time will show that through this Bill a very important contribution will have been made to the issue of partnership between industry and Government, which is such an important role today. It has not yet been completely worked out in the various industries of this country, but I hope very much that the Bill will be given a full and fair chance to demonstrate the success which we believe it will have. I am sure that the industry will welcome it.

7.34 p.m.

Mr. Frederick Lee (Newton)

The hon. Member for Aylesbury (Mr. Summers), in common with many other hon. Members on the Government side of the House, always wants to have a thing both ways. He told us that the success of the steel industry during the last year or two had nothing to do with nationalisation, and other hon. Members have told us that nationalisation has not been a success. That is a naive argument.

Mr. Summers

I have never attributed any weakness in the industry since nationalisation to that fact. Output fell almost directly the industry was taken over, but I am glad to say that it has risen again.

Mr. Lee

All that the hon. Gentleman has done is refuse to agree that the success of the steel industry has anything to do with nationalisation.

The hon. and learned Gentleman the Member for Middlesbrough, West (Mr. Simon) produced a most remarkable argument. He said, in effect, that the Government proposed to denationalise this industry because, in their opinion, other nationalised industries have failed. I should have thought that the logical sequence to that would be to try to denationalise one of the industries which they say has failed. They say that there has not been time to see whether the steel industry would be a success or a failure under nationalisation, and, therefore, it would seem that the Government and their supporters should give a chance to the industry to see whether it would be a success or a failure.

I know that the Government are hard put to it to produce arguments to justify what they are doing in this Bill. Nevertheless, I thought they would do something better than what they have done to justify this Measure, particularly if they want the country to take them seriously on the subject. The hon. and learned Gentleman tried to bring in the old one that the T.U.C. were never really keen about the nationalisation of this industry. He should read the 1952 Report of the T.U.C., in which they not only go on record that they are in favour of the nationalisation of the industry, but communicated with the Minister himself—I will take his corroboration on this—to point out that they condemned the Bill "bell, book and candle," and are in favour of retaining the nationalisation of the industry.

An argument advanced time after time from the other side of the House has been that if the Labour Party are to insist on nationalising this industry, and if it is to remain in the political cockpit for years, it will be detrimental to the best interests of the nation. It is a most peculiar argument, particularly from people who deliberately are pitching the industry, as it were, into the political arena again.

In the Labour Party we rest our case on the fact that no matter from which angle one judges the steel industry since nationalisation, it has been a complete success. The Government, by their action, are making it inevitable in the years to come that bitter political battles will be fought around this issue of steel. I would remind the party opposite that steel was thrown into the political cockpit because of the callous disregard in the 'thirties of the nation's interests by those who were then in control of the industry. This Bill is calculated to hand the industry to the same people with a callous disregard of the social consequences, revealed in such places as Jarrow in the early 'thirties.

I cannot understand how the Government can argue at this stage, as the Parliamentary Secretary tried to do today, that it is in the national interests that this Bill should become law. I always understood that the test which Toryism applied to the success of any industry was the profit motive.

Mr. Nabarro

And a very good thing. too.

Mr. Lee

If that is so, the hon. Gentleman should be in the Lobby with us tonight. He boasted the other night of his consistency since this Bill came before the House, and now he is saying that the best way to judge the success of an industry is by the profit motive. I shall welcome him as he walks arm in arm with us to the Lobby tonight to vote for the rejection of the Bill.

If we take the test of the ability to produce steel, the industry has been an outstanding success since nationalisation. We are now told that the production of steel is breaking all records. We know that during last year the industry was unable to obtain the amount of scrap required from Germany and other places and that production had fallen——

Mr. Nabarro

Certainly the steel industry is breaking all records, but could not that reasonably be attributed to the whiff of freedom in the air?

Mr. Lee

Again, the hon. Gentleman is not being quite as consistent as he thinks about the "whiff of freedom" as he calls it. Since nationalisation and despite the threats of the horrid things which would happen to the steel industry because of it, production has increased, and the industry is now doing a far greater job of work than ever before. Whether we regard the matter from the profit motive point of view or from that of ability to produce steel, there is no case for denationalisation.

I have not yet heard either from the Parliamentary Secretary or the Minister, which of the Clauses of the Bill will have the effect of increasing production by one ounce. I can read into the Bill very many ways in which production could be reduced. I attempted to argue that on Second Reading. I maintain that there will be an artificial sub-division of the industry which may well result in lack of balance. No one on the Government Front Bench can tell me who will own which part of this industry in 12 months' time.

The Parliamentary Secretary claimed that the Bill was introduced in the national interest. How can that be said when it is not possible for the Government to tell us what percentage of the industry will be publicly owned and what percentage will be in private hands? How can they convince the nation that what they are doing is in the public interest? It is obvious that, having committed themselves to a whole range of actions because of the promises they made at the General Election, the party opposite are determined that at least one of their promises shall be honoured. And what better promise to honour than the one made to the steel barons who have paid so much into their election funds for so many years?

I submit that it is grossly wrong that we should be subjected to the risks which will arise through the implementation of this Bill when we know how much the nation will depend on its ability to produce and process steel, and export it. Having based his case on the national interest, the Parliamentary Secretary completely failed to show us how increased production would be ensured because of the Bill. All that the Bill does is to make sure that profits go where the party opposite want them to go.

The hon. Member for Blackley (Mr. E. Johnson) said that we should consider the matter from the point of view of the customers, and I agree. We should also consider it from the point of view of those employed by the customers. The engineering and steel-using industries, especially those in Sheffield, are very worried about where they may obtain supplies of steel. They have lost much business because of their inability to secure steel. When hon. Members on both sides of the House are hoping we shall be successful in increasing our exports; when the great unions are in favour of nationalisation and a great industry, employing over 4 million people will be jeopardised by its provisions, I consider that it is a most unpatriotic action for the Government to bring forward such a Bill.

The Parliamentary Secretary argued that the Factories Acts would cater for the welfare of foundry workers. If that be so, why is it necessary for us to try in every way possible to get implemented the recommendations of the Garrett Report?

Mr. Low

I would ask the hon. Member to inquire of his hon. Friend the Member for Lanarkshire, North (Miss Herbison) why, if the Factories Acts do not cover the welfare of the foundry workers, she withdrew her Private Member's Bill?

Mr. Lee

The answer is simple. My hon. Friend's Bill was withdrawn upon a guarantee from the Government that what was contained in it would be promulgated in regulations.

If the recommendations of the Garrett Report, or some of them, have been accepted by the Government in the form of regulations, and the welfare of the foundry workers is ensured through the Factories Acts, it is ill-advised for the Government to withdraw the famous Clause which gave rise to an amicable discussion the other night between the hon. Gentleman and myself. Unless the veto of the Board against anti-social development is preserved, it is no use relying on Clause 3 (1, e), which refers to welfare. Once those anti-social developments have taken place Clause 3 cannot provide better welfare facilities for the foundry workers.

Mr. Nabarro

The same point was made on Report, and I answered it by saying that any new foundry would obviously conform to the highest standards of health, safety and welfare. The hon. Gentleman has described the foundries as the "slums" of the industry——

Mr. Lee

No, the Cinderella.

Mr. Nabarro

I am sorry, the Cinderella of the industry, and the problem is to raise the standards of health, safety and welfare in the old foundries.

Miss Margaret Herbison (Lanarkshire, North)

The hon. Member for Kidderminster (Mr. Nabarro) raised this point on the Report stage. He suggested that he knew more about foundries than I do. Is he aware that even foundries which have been built since the publication of the Committee's recommendations have not incorporated in them the recommendations of the Garrett Committee?

Mr. Lee

I read in the "Observer" last Sunday a commentary on the present position of the Minister. The writer in the "Observer" took note of the different atmosphere towards the Minister of Supply now prevailing on the benches opposite. It was pointed out that a short time ago the Minister was received in grim silence by the back benchers opposite. But now he had arrived." The party opposite recognised him as a member of the first eleven, as it were——

Mr. Nabarro

A very powerful one, too.

Mr. Lee

The article went on: The rank and file automatically include him in the first eleven and his photograph appears among other notables on Conservative pamphlets, reminding one of those shy, lean faces that peer out from faded school groups"— I am sure the "Observer" was not being unkind to the right hon. Gentleman in describing him as being a little faded. And indeed he is not unlike those legendary figures we used to read about in 'Chums' and 'The Boys' Own Paper'—those heroes who, chosen to play for the side at the last moment, score a winning goal as the final whistle blows, thus snatching victory for the old school to the fury of the town cads. We can congratulate the right hon. Gentleman on achieving even more than the "Observer" realised. He has managed to secure a goal not only for the old school, but also for the City boys—I will not call them the town cads. By this Bill he has undoubtedly consolidated his position in the party opposite and, at the same time, rendered a great service to the City magnates who are to be given back the steel industry at reduced terms. In doing so, the right hon. Gentleman has probably ensured that if and when the party opposite want to raise another £1 million or so for the Woolton Fund there will be ample resources made from the profits of this industry with which they can face the country at the next General Election.

The main reason for the Bill is to ensure that economic power shall continue to reside in private hands. The Tories know perfectly well that so far as we can take economic power from that type of person and give it in increasing amounts to the people of Britain, so long can we continue to emasculate Toryism as we know it. The main basis is the political fight for power. We understand that. It is because we believe that increased economic power must be given to the people that we shall re-nationalise this industry as soon as possible.

7.52 p.m.

Mr. Gerald Nabarro (Kidderminster)

This is the third time during our debates on this Measure that I have been privileged to follow the hon. Member for Newton (Mr. Lee). I hope that on this occasion we shall not be side-tracked into a long discussion on safety, health and welfare conditions in iron foundries.

Dr. H. Morgan (Warrington)

The hon. Gentleman is afraid.

Mr. Nabarro

The hon. Member who has just walked into the Chamber and who is rarely seen in this House says that we are afraid of discussing that subject. I remind him that during our consideration of the Bill I have said a great deal more about iron foundries than about any other single aspect of this question.

I conclude all these remarks now by making the simple statement that I am second to none in wishing to see the health, safety and welfare conditions in iron foundries improved as early as possible. I want all the suggested provisions in the Private Member's Measure promoted by the hon. Lady for Lanarkshire, North (Miss Herbison) embodied in Orders under the Factory Acts. That is really the most effective way of carrying out those desirable improvements.

Throughout today's deliberations we have had from hon. Gentlemen opposite the constantly reiterated suggestion that the sale of the nationally-owned steel companies is to result in profit for the few. The hon. Member for Newton ran true to form in suggesting that there is something highly immoral about profits. I love profits. The bigger the profit earned by any company with which I am associated, the prouder I am. There would not be a Welfare State today without industrial profits. An hon. Gentleman interjects and says, "Nonsense." I would point out that, on average 70 per cent. of all industrial profits earned today go back to the Treasury. They are the main bulwark of the National Health Service, public education and the social services to which all parties in this House have contributed.

But there is another reason which is of equally powerful import. There can be no expansion of production, no re-equipment, no additional production facilities, no steady increase in the tempo of our national production, unless there are moneys available to plough back into businesses. Those moneys can mainly be derived from profits, corporate earnings and savings.

On this theme, surely, the short answer to everything which has been said by hon. Gentlemen opposite is simply this: we infinitely prefer to have private and public companies, the capital of which is subscribed by tens of thousands of investors, earning healthy profits, than to perpetuate a system of nationalised State-owned industries earning dismal losses. Only a small part of the steel industry is to be sold, according to hon. Gentlemen opposite. The hon. Member for Rotherham (Mr. Jack Jones) said that only a part of the steel industry would be bought.

Mr. Jack Jones

I did not say "a small part."

Mr. Nabarro

The hon. Gentleman said that only a part of the industry would be bought. That is a complete fallacy. The overwhelming majority of the units in the industry will, I think, be sold by the Agency within a period of 18 months or two years. There will be a small part which it will not be easy to sell—the obsolescent plants. An hon. Gentleman opposite agrees. There is nothing shameful about that. The obsolescent plants were taken over at a very low figure and, in the intervening four years they have been suitably depreciated so that their value on the State's books is now almost nothing. It will not result in a heavy loss to the taxpayer even if there is a tiny residual of the steel companies and their associated works which are not easily realised by the Agency.

There is a simple case which may be cited in support of my argument. One of the nationalised steel undertakings owns many of the hand tin-plate mills in South Wales. They are being shut down. They have been replaced by the modern plant at Trostre. Those small hand mills in the Llanelly area are written down now to an almost nil value in the State's books, for they were taken over at a very low figure in 1949. The hon. Member for Swansea, East (Mr. Mort) made a powerful speech on this subject during the Report stage. No doubt he will readily agree with what I have said. They are obsolescent plant of almost nil value.

Therefore it is unjust for hon. Gentlemen opposite to put these obsolescent plants into a general consideration of the realisable value of the State's assets and into a direct comparison with the highly efficient modern plants which ought to fetch a reasonably high price. The hon. Member for Sheffield, Park (Mr. Mulley) was sadly misinformed in this matter. He said that in his view the 1949 take-over price ought to be fixed as a minimum for the re-sale of the assets of the steel industry subject only to an adjustment in respect of the fall in value of money. What a stupid formula.

One would assume that in the four years there has been no change in the extent or in the value of the fixed assets of the industry. What has happened since 1949 is that there have been a large number of additions to the industry. Similarly, there have been a number of subtractions. The pattern of the industry as a whole is somewhat different now compared with what it was four years ago. I have no doubt that in the sale of these State assets some units will show a profit and some will show a loss compared with the 1949 figures. Some units will sell at almost the same figure. A small residual will be unsaleable.

But, taking one unit with the other, and taking one year with another year—a formula which the party opposite were so fond of in their nationalisation Measures, the Agency should, on balance, succeed in obtaining a global or aggregate figure which fully compensates the State for the original take-over value and the price paid, plus the value of the assets added and less the value of the assets realised in the course of the last four years. I am full of confidence as to the outcome of this delicate and difficult financial transaction. I hope that it is successful in the national interest and, of course, in the interest of the great bulk of the taxpayers.

I have one final word to say on the national production of steel. Again, the hon. Member for Sheffield, Park talked of a steel production in Britain of 25 million tons. In fact, hon. Gentlemen opposite, in many speeches in the course of the debates on this Bill, have inferred that the sky is the limit for steel production in the United Kingdom. That is to insulate themselves against world conditions. Of course, while there is the market for them, both abroad and at home, we want an ever-upward curve of steel output and steel products of every description, but we in this country, whether the industry is nationalised or owned by public companies, will not determine what is the global demand for British steel. That will be determined abroad by the pattern of the demand for British manufactured goods, British services and British products.

It is a reflection—and I say this in no party political or partisan spirit—on the steel industries of the Western world to say that Britain's production in the next 12 months will probably be of the order of 18 million tons. American production is in the order of 108 million tons, and, adjusting that ratio of 18 to 108 for the much larger number of industrial workers in the United States as compared with this country, it still is the fact that every American worker has approximately twice as much steel available to him for home consumption as the British worker, in exactly the same way as the American worker has two and a half to three times the amount of electrical power available to him as has the British worker. I hope to see that adverse ratio reduced, for electric power and steel must surely be the final arbiters in the rate of industrial growth and progress.

Little has been said to compliment my right hon. Friend, who I am sorry is not in his place at the moment, upon the skilful way in which he has handled this Measure during its long passage through this House. He has shown not only perspicacity but a great deal of pertinacity, for there have been righteous and legitimate criticisms of many aspects of the Bill from this side of the House, as well as from the other side. I shall not repeat in detail what has been said by so many hon. Members on this side, but it is reasonable to say that the pattern that is now created for this industry ought to demonstrate to the country that there is a workable alternative to the State monopoly and nationalisation that is proving such a dreadful failure in other directions.

I hope this Bill will leave this House tonight, that, if there is a Division, there will be a substantial majority for its Third Reading, and that, when it goes to another place, it will make a rapid passage through that House. Finally, I hope my right hon. Friend will be encouraged by this important experiment in our industrial affairs that millions of men and women in this country who are not blinded by party political considerations— [Laughter]—the hon. Member for Cleveland (Mr. Palmer) cackles, but he is the most partisan hon. Member of this House—there are millions of people who are not blinded by party political considerations, and I believe that they will recognise between this date and 1956, when the next General Election takes place, that this Measure is indeed a statesmanlike and workmanlike alternative to State monopoly and nationalisation.

8.8 p.m.

Mr. R. E. Winterbottom (Sheffield, Brightside)

I ought to congratulate the hon. Member for Kidderminster (Mr. Nabarro). His reputation for talking about anything but the subject matter which is before the House has suffered a relapse tonight, because he actually talked about the Bill during 50 per cent. of his speech. As to the other half, quite frankly, while the hon. Gentleman himself may have understood it, I could not.

There was one thing which the hon. Gentleman said which clearly showed the difference of opinion on the Bill between the two sides of the House. I hope that I have his words correctly, because my shorthand is not too good, but the hon. Gentleman said that he infinitely preferred to have public companies with thousands of investors earning profits than the method of nationalisation. Probably, that will be good enough for my purpose. In so far as we believe that the nationalisation of the industry has been socially necessary, we shall know precisely what to do at the next General Election, as far as the hon. Gentleman is concerned.

I am sorry that the Minister is not in his place at the moment, but to the Parliamentary Secretary I want to say that the story of the Third Reading of this Bill has become a case of "Save me from my friends." Most of the speakers from the Government benches who have spoken in support of the Bill have actually approved at length many of the ideas brought forward by the Opposition in Amendments during the earlier stages and rejected by the Government. May I quote one instance of an hon. Member who spoke from the point of view of the customer of steel? He referred to the necessity for a strong Board and a Minister who is firm, a Board and a Minister not dominated by the Federation. These were precisely the motives which permeated many of the Amendments we put forward to this Bill, which were discussed during the Committee stage.

I could go on with other quotations from hon. Gentlemen opposite showing how, during the Third Reading stage, they have completely kicked overboard many of the ideas for which the Government have been standing. We are now wondering whether they realise what they have said, and, if they do, whether they will carry their ideas to their logical conclusion and go into the Division Lobby with us tonight.

We are coming to the end of the Parliamentary discussion on a Bill which was never wanted by the majority of those who are working in the industry; and I am speaking from my own experience, coming from a steel constituency. Probably, in my division, we have more of Sheffield's steel than any other division in Sheffield, and I know that the workers in the industry hate this Bill and regret very much that the Government have brought it forward.

Mr. Simon

Would the hon. Gentleman allow me to contradict that statement, on behalf of my constituency, which is a different steel constituency?

Mr. Winterbottom

That may be, but if we take an analysis of the result of the last General Election and we weed out those few steel constituencies from the rest, we on this side would have an overwhelming majority.

The Bill has gone through the crucible of discussion and has come out as imperfect as it was when it started. All it will do when it becomes law is to restore power to an industry the personnel of which had a notorious record and a notorious name for neglect of vital British interests, both at home and especially in relation to exports, before the last war. I am not going to argue that case or go back so far into history, but I say that because, from our experience of those days, we fear that many of those people who were in charge of the industry then will now come back into positions of authority again and dominate the industry by means of the provisions of the Bill.

During the 1945–50 Parliament I often wondered what would be the form of the counter-revolution if ever the Tory Party got back to power. They have got back and I now know what that counterrevolution will be like. They want to restore what they commonly call private enterprise, but they also want to do something else. According to this Bill, at any rate, they want to bolster up those powerful elements who were in charge of the industry—and who will doubtless be in charge of it again—with all the State help they can, even State capital, without placing upon them any corresponding responsibilities to the State.

There are people in the industry who can now turn to the financiers, who have had a very good innings out of the rise in the Bank rate, and the brewers, who will have a very good innings out of the monopoly which is being given to them as a result of the Licensed Premises in New Towns Act, and say to those interests and to others, "Now it is our turn to get a share of the cake. Our contribution to Lord Woolton's fund is now bearing profits. It was a wise investment for us to get our hands back on steel." That is the situation and I am making this declaration on Third Reading because it is the bluntest way of expressing what has been the intention of the Government throughout the whole of these discussions.

During the Committee stage a great deal was said about the question of coordination, and there is a recognition in the Bill that co-ordination is necessary. For all practical purposes, however, the Bill has only a very nodding acquaintance with the real needs of co-ordination. It pays only lip-service to the idea, as it does to planning and control. Whenever we have talked of introducing anything that would impose a control over, the real owners of the industry, it has been relentlessly turned down by the Government. That is one of the things which have shocked most of those who earn their living in this industry.

Having said some very harsh things, I now want to say something nice. I compliment the Minister and his Parliamentary Secretary on the very charming way in which they have conducted the Committee stage. That compliment is due to them. I also want to pay a compliment to the Minister for two other things. One is his good-humoured way of saying "Not likely" and the other is his cleverness as a political ventriloquist. When he sat on this side of the House he very often set up and knocked down his own Aunt Sallies, which is a favourite Tory game, but in this case he has set up a puppet Board—a set of marionettes—to allay the suspicions of the general public as well as those employed in the industry.

He calls this a supervisory Board, but he refrains from declaring what is very evident, that the people who will be pulling the strings and manipulating the marionettes will be the Iron and Steel Federation. This is the last will and testament of the late Sir Andrew Duncan. It is his heritage to this Tory Government.

Many concessions have been granted in the course of the Committee stage and we have had one or two important ones during the Report stage, especially in regard to the Schuman Plan, for which we worked very hard. The Minister has granted these in his very good-humoured way, but I would point out that he has not made a single concession with regard to his power of interfering with the industry if it fails to play its part in the national recovery. If it is not willing or able to do so because its owners lack the knowledge or lack a social conscience, or because of internal strife and dissension after it has been given back to private enterprise, this Bill fails to provide for the imposition of the necessary controls, and our economy will suffer as a consequence.

We have obtained two consolation prizes from this Bill. The first is unimportant, but it is there. The Bill is now much better than it was when we started the Committee stage. One or two slight modifications have made it less blatantly partisan than it was previously. The second consolation is that the new owners and managements are now facing their supreme task. If, as a result of this Bill, the iron and steel industry does not develop to meet the needs of Britain's recovery; if the owners look at the profit and loss account instead of the national interest; if they carry out their former restrictionist tactics in their desire for profits, and if unemployment rears its ugly head in this industry and affects the employment of other industries, I warn the Minister and the Government that they will be condemned heartily and soundly by everybody for having sacrificed and sabotaged the national interest for the sake of a few.

8.18 p.m.

Mr. Aubrey Jones (Birmingham, Hall Green)

I rise with some reluctance because I have already spoken overmuch in these debates; but I wish to reply very briefly to one or two of the major points which have been advanced from the benches opposite.

First, I want to reply to the question which was posed at the outset by the hon. Member for Rotherham (Mr. Jack Jones), namely, whether this Bill is really necessary. Hon. Members opposite flatter themselves that the Iron and Steel Act of 1949 gave the State a complete and absolute control over the industry. I concede that straight away, but what alarms me is that hon. Members opposite fail to recognise that for that absoluteness of control they have inevitably had to pay a price.

Politics and, indeed, all human organisations are a matter of balance. One can gain in one direction only at a certain expense in another direction and, as a general rule, it is true to say that the greater the absoluteness of power at the centre the greater is the cost in terms of energy and vitality at the circumference. That is true in relation to the manner in which this industry has been operating since the Act of 1949.

May I give an example? After the outbreak of the Korean war, the price of imported ore, in common with the price of most raw materials, rose to considerable heights. There was reason to believe that the rise was temporary, and if, in fact, it were temporary, there was a case, it could be argued, for not burdening the users of imported ore with this increase in price. There was a case for spreading the increase over the whole of the industry and averaging it out; and that, in fact, is what happened.

In real life, however, it is very difficult to disentangle the temporary from the permanent, and what appeared to be temporary, it became apparent in the course of time, was, in fact, and to a large part, permanent. It became clear that this increase in the price of ore contained a substantial permanent element and it is clearly wrong, as a permanent measure, that users of home ore should, to a certain extent, be subsidising the users of imported ore.

Accordingly, in the autumn of last year, my right hon. Friend made an adjustment. He decided that the price to the user of imported ore should be more closely related to its real cost. But the companies had made representations to that effect at the beginning of 1952. There had ensued nine or 10 months before the recommendation was put into effect. Why the delay? I suggest that the delay was due entirely to a difference between the psychology of the companies and the psychology of the State Corporation, of the nationalised undertaking.

Here, on the one hand, were these companies faced with the Bill and, therefore, with the prospect of an imminent independent existence, faced, therefore, with the necessity, very soon, of standing or falling by their own results. Accordingly, they were pushed on by the imminence of this prospect to know the full reality of their position, a reality which they would have to disclose to the world. On the other hand, there were the Iron and Steel Corporation of Great Britain delaying, not for any personal reasons, not through any inherent tendency to procrastinate, but merely because, from the nature of the case, they were not subject to this pressure and were content with a broad average of results over the whole of the industry.

I suggest that in that difference of approach there lies very great significance. The efficiency of an industry depends, in the last resort, on the degree of discipline and the commercial pressure to which its producing units are subject, and quits clearly that discipline and pressure is at its greatest when units have to stand or fall by their own results—automatic when they are independently owned. It is not so easy to achieve that when they are merged in one owner. I do not say that it is impossible, but it is not nearly as easy; the temptation is the other way, and it is very difficult to resist the temptation.

In short, I suggest that in the short time during which the Act of 1949 has been in operation, there has been this incipient tendency, there has been apparent a weakening of the discipline and pressure to which the individual producing unit is subject. I believe that in the long run that would bode ill for the welfare of the industry. In my submission, that is the case for Part III of the Bill.

Then, it has been argued that the control envisaged in the Bill is a sham. I concede that where there is one owner—the State—the control of the State over the industry is complete and absolute. This Bill disperses that ownership and therefore, it might be said, disperses control. The control becomes indirect, but I submit that nonetheless it is effective and, indeed, more effective. When an industry has been nationalised, it is immunised and insulated from all external pressure. There is no competitor, there is no potential competitor. The Minister can give a direction to it, but he has no sanction with which to fortify his direction and instruction. Here, in this Bill, on the contrary, there is a sanction—the sanction of competitive building by the State. In the last resort, the State can step in and itself can build and compete with the industry.

I concede straightaway that there must be a will on the part of those responsible for the operation by the State to make the sanction work. I concede, too, that there must be the ability to make it work. It may well be that in the course of time it will be desirable to strengthen the Measure to ensure the effective operation of that sanction. I am prepared to concede that. All I would ask hon. Members opposite to do, before they commit themselves to re-nationalisation, is at least to give a second thought to this principle. I suggest that the principle enshrined in the Bill of retaining outside an industry a pressure which they themselves cannot exert against the national- ised industries is a most important and novel feature and that hon. Members opposite should think twice before they reject it.

8.28 p.m

Mr. Arthur Palmer (Cleveland)

At this late stage of the evening, and on Third Reading, it is perhaps rather difficult to introduce an argument which is in any sense new, and I shall certainly not make the attempt. I can only give to the House, very briefly, the reasons why I think this Bill, like the arguments in favour of it, should be decisively rejected.

It is true that a certain number of Amendments, from this side of the House, have been accepted and a certain number of so-called concessions made by the Minister during the discussions, but I suggest that the Conservative Front Bench have made no fundamental concession at any stage to the point of view of my hon. Friends. When all is said and done, the purpose of the Bill remains the same now as it was at the outset. It is to undo the work of the 1949 Act and to establish in its place this rather peculiar Conservative alternative to nationalisation.

It is quite clear that there are two things which the Bill does not do. It does not create, nor do I think it could create, conditions of competitive private enterprise. I do not think that can be done today in the iron and steel industry, for obvious technical reasons. There must be large concentrations of capital and there must be understandings between the few firms in the industry which dominate it.

Nor do I think that there is anything remarkable about that. It is possible for every man, within reason, to have his own grocer's shop, although that would mean a great number of grocer's shops. It is possible for every woman to have her own milliner's business although that would mean a lot of bad hats. But in any realistic concept of modern industry it is not possible for every man to have his own steel works, and on that assumption an industry like this must develop more and more monopolistic tendencies. I am prepared to accept that, and it does not worry me in the slightest. What I do say is that if we have monopoly then private monopoly is certainly the worst type of monopoly we could have, and I prefer instead that the community itself should own and control the monopoly.

The truth about this Bill is that it does not create for the industry—it could not do so if it tried—competitive private enterprise conditions. In fact, it returns the industry to very nearly complete private monopoly once again. Nor do I think that the Bill adds in any sense to the practical efficiency and effectiveness of the iron and steel industry. I did try to point out before—I do not know whether I am entirely right on this, but I did try—that the practical needs of the iron and steel industry were probably similar to the practical needs of British industry in general.

That industry needs adequate supplies of capital; it needs further mechanisation; it needs further electrification—I know I shall take the hon. Gentleman the Member for Kidderminster (Mr. Nabarro) with me on that point; it needs concentration of production in units of higher efficiency; it needs research facilities, for although they are quite good, they still need to be further developed; it needs education and training schemes, good management, sound human relationships, and the rest of it. All these needs it was perfectly possible to meet under nationalisation, and they were, in fact, being met under nationalisation. Certainly, no answer has been given during the debate to show how any of these practical considerations are to be advanced by the present Bill. Not a single reason has been advanced.

I am therefore, driven to the conclusion that the main motives of the Bill are those of the narrowest party kind, because, after all, the Conservative Party are quite prepared to accept nationalisation when it suits them. They usually make a virtue out of necessity when they do so, but they are quite prepared in certain circumstances to accept nationalisation. Coal: that is, of course, a political storm centre; they are prepared to accept nationalisation there.

Mr. Frederick Messer (Tottenham)

It does not make a profit.

Mr. Palmer

It did not make a profit always—at any rate, not a very big one.

The railways: well, the railways were bankrupt. Electricity and gas: well, there is no great point of principle there: electricity and gas are public services in their nature. But so far as steel is concerned, here there are still rich profits to be earned, and, as we know from the hon. Gentleman the Member for Kidderminster he is very much in favour of them, and we cannot complain, knowing his ideology. So it seems to me the profit principle is the only consistent reason why the Conservative Party have, in this irrational way, set out on the course of denationalisation for iron and steel.

I must make this confession—I think have made it before—that I would not say that the organisation so far in any given nationalised industry is necessarily perfect. In this matter of organisation under nationalisation we are only at the beginning. We have to experiment, and if this Bill were an abstract Measure, existing independently of current politics in space and time, just an exercise in organisation, I would concede that in some way—it is my own point of view, and I do not know whether I take my hon. Friends with me in saying this—I would concede that in organisational form it can claim certain merits.

The span of supervision is wider, for instance more logical. If we had retained public ownership I myself certainly would not have ruled out the possibility in years to come of the idea of some Labour amending Bill to the 1949 Act for organisation in the light of experience. I think that that would have been a genuinely evolutionary development, because it would have been founded upon the valid principle of public ownership for a monopoly industry.

However, I think it was the hon. and learned Gentleman the Member for Middlesbrough. West (Mr. Simon) who persisted in the curious idea, to me, that it was possible by this Bill instead to introduce in 1953 some measure of competitive private enterprise into iron and steel. If I single him out it is because we often share the same local newspaper. I just want to say this to him, that it seems to me he has concentrated so much on that issue because he has a kind of guilt complex on the matter. He is not too sure about it. I hope he will think that one over.

Mr. Simon

I would assure the hon. Gentleman that I have no complex at all, but would he not recognise that there is a difference between, so to speak, organic concentrations based on technical reasons, and artificial monopolies based on restrictive practices, which could well be swept away by this Bill?

Mr. Palmer

I am arguing that this Bill and its intention is not in any sense a genuine evolutionary development. There might have developed later a case for an amending Act, but to break up the 1949 Act and to establish in its place a so-called "middle" system which is neither private enterprise nor public enterprise in its true sense, and then to try to pretend that it is perfect and that nobody in the future will ever want to alter it is, I suggest, an essay in political futility.

I think that we were right to be constructive in our attitude towards the Bill in the Committee and the Report stage. We did not obtain many, if any, concessions of principle, but one or two small improvements were made here and there. I have no doubt that the Conservative Party think that this may tempt us away from any desire to re-nationalise the industry. I believe that is the broad strategy of the party opposite. I am going to suggest instead that that attitude may assist the process of re-nationalisation, because when we come to re-nationalise there is no reason now why, for example, we should leave the foundries or mining out of our scheme. We can get the lot in and broaden the span of control.

I suggest that this Bill has not been in any real sense fundamentally improved by the Committee and Report processes, that it is an extremely bad Bill in principle, and I hope that the House will decisively reject it.

8.36 p.m.

Mr. Robson Brown (Esher)

I listened with great interest to the hon. Member for Cleveland (Mr. Palmer), and I have the feeling that the various speeches which he has made during these debates have been constructive, sincere and based upon logical reasons. Sometimes I felt that he was well over half-way on this side of the House. I might have been tempted to try to answer some of the arguments advanced by hon. Members opposite, but I think that they have already been dealt with so effectively by some of my hon. Friends that there is no need for me to go into those matters further.

I want to correct the wrong impression created by the hon. Member for Rotherham (Mr. Jack Jones) when he suggested in his speech, as I understood him, that the present high level of productivity in the industry was directly resulting from nationalisation. In particular, I think he suggested that the development schemes now bearing such positive and dramatic fruit were the product of the nationalised Board. I would remind him that the original development schemes upon which we are now working were evolved, called for and required by the National Government of which both the parties were members.

Mr. Jack Jones

I am sure that the hon. Gentleman would not wish to misquote me. What I said was that this matter—and if he looks in HANSARD he will see that it confirms what I am now saying—was due to the contributions made by all, management and men alike. I made the point that I would be a fool to suggest that it was a direct result of nationalisation. I said that the Federation produced this plan under threat of nationalisation and did it in rather a hurry.

Mr. Robson Brown

That is the point I want to take up with the hon. Gentleman. I repeat that there was no suggestion of nationalisation at the time the development scheme was prepared during the war.

Mr. Fienburgh

Surely the hon. Gentleman would not want to mislead the House. The letter asking for a development plan to be prepared was sent by the Caretaker Government after the date of the General Election had been announced. There was before the country at that time an election manifesto from the Labour Party listing the public ownership of steel as one of its aims. Therefore—and I am sure that he will agree on this—the first plan was produced in August of that year. It was scrapped as soon as the Labour Government was effectively formed for a second plan, which was much better and much stronger, to be produced in December-January. Therefore, there is no suggestion that this was just a product of war-time planning.

Mr. Robson Brown

My knowledge of the industry is such that I know that at the end of the war the industry was preparing a complete and absolute survey, a most comprehensive survey, of its development plans for the post-war period. That is a matter of historical fact which can be easily verified.

With regard to development plans, from now on as much thought has to be given to the modernisation of existing plant as is given to additional production. In this respect, I hope capital will be made available so that the West Wales steel works will be able to change from the manufacture of sheet-bars and tinplate bars to other products so that its plant can be kept in existence.

I also wish to refer to an observation made by the hon. and learned Member for Kettering (Mr. Mitchison), whose contributions to these debates throughout the course of the Bill have been extremely valuable. He said we were ignoring the trade union movement in the composition and representation envisaged in part of the Bill. Surely he has forgotten that there would be provision for substantial representation upon the Board itself. That is the heart and centre of the whole matter.

I wish to join in the general appreciation which has been expressed of the tone and standard of the debate throughout the stages of the Bill, and I also wish to pay my meed of praise to the Minister, the Parliamentary Secretary, the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) and the hon. Member for Rotherham. I honestly believe that this has been an example of Parliament at its best, and it has been a great pleasure to me to watch it in process and to learn from it. I also wish to say most sincerely that many Amendments which have come from the Opposition have powerfully strengthened and reinforced the Bill; throughout the Opposition have objectively made valuable suggestions which have improved the Bill and made its operation easier.

In its final form the Bill represents a revolutionary development in the relationships between the State and large-scale industry. I say "revolutionary development" because, from the very beginning, I have felt that the Bill was an act of faith in every sense of the term which has now been fulfilled, but we must now see how it works out in practice. It will depend on three factors. The first is the composition of the Board itself and the quality of its leadership; that is a very important element in the success of the steel industry from now on. The second is a satisfactory realisation of the assets. There must be no doubt in anyone's mind that the assets of the steel industry have been disposed of in the best interests of the nation and for the best possible price that can be obtained. The third is the state of trade both at home and abroad.

I feel that we can be confident about the first and second factors, but the state of trade depends on many factors, some within the control of the industry and many outside its control. We have argued tonight about the nationalised industry as against free enterprise, but the same elements, the same forces, the same stresses and the same strains internationally are imposed on both, and neither one nor the other can guarantee a standard of trade, price or employment, for both have to face the same pressures from outside.

I now want to say a word about the spread of responsibility and accountability in the Bill. I have already emphasised my views on responsibility and accountability. I most sincerely feel that under the Bill the Minister will be expected to act as a Minister of State and not as a controller. The Board will be required to act as a responsible body and not attempt to manage the industry, and the industry will be expected to have as its first regard the public interest and the maintenance of a healthy, efficient and expanding industry. Each of the elements, the Minister, the Board and the industry, will act so as to balance each other, and that, as I see it, can bring nothing but good. Such an arrangement will take the industry out of politics, and I hope it will stay out.

I should like to ask hon. Members opposite to remember—it has been emphasised on both sides before—that this country of ours has got great courage. It has been prepared to carry out great political experiments in different industries and in different ways. Here, we on the Conservative side, in deep sincerity are replacing nationalisation by federation. The underlying inspiration of this Bill is to bring management, workers and consumers together. I am not going to take up time saying very much about the workers in the industry. They and the management have been praised, and they have deserved it. The hon. Member for Rotherham was quite right when he said that the management and the men more than anybody else have been responsible for the dramatic increase in steel production.

This combination of the management, the men and the consumers represents joint industrial consultation at its highest level. It is a federation of compatible and mutual interests. This Bill proves that progressive Conservatism has not only ideals but can give them practical form. That is what this Bill sets out to do.

Our aim in this great industry, and I hope in others, too, is that it should work for the nation first, last and all the time. I hope, in the final stages of this Bill—at the beginning we indulged in political flurries and used party argument—that hon. Members opposite will accept that inside the steel industry there is a tremendous sense of national outlook and of love of country. I believe the effect of this Bill on the working of the industry will prove up to the hilt that the confidence Conservatism is placing in the men in the industry will not be misplaced.

8.48 p.m.

Mr. George Chetwynd (Stockton-on-Tees)

There has been constant wooing by the Government of Members on this side of the House to accept this Bill as a kind of permanent settlement of the iron and steel problem. That wooing has been to no purpose. Anyone would have thought, listening to the Parliamentary Secretary moving the Third Reading of this Bill, that he was submitting a non-controversial Measure on a Friday afternoon. It is right at this stage, if he has not been disillusioned already, that we should remove any illusions which the hon. Gentleman might have that this Bill is a kind of compromise which gets away from the real differences between the parties on this issue.

This Bill does not represent a halfway house where this problem can be left in perpetuity. In our view, the only real and lasting solution of the problem is to have the ownership and control of the industry in the hands of the State. All the efforts of Government supporters, with sweet reason, to make us believe that this is a compromise is wasted effort, because this cannot be anything of the sort. This Bill is no compromise, and I believe that hon. Members opposite have been saying it is with an eye not to present legislation but to future elections.

Hon. Members opposite want to come along when this problem arises again and say, "Here we have produced a moderate compromise. Why not leave it alone?" [HON. MEMBERS: "Hear, hear."] But why did the party opposite not leave it alone? Why did not the Government approach the matter by saying, "Here is a Measure which has given some kind of stability and progress to the industry. Production is going up at record rates and the profits of the industry are going up too. We will leave things as they are." Why did the Government not accept that as a permanent settlement for this industry? Of course, it is clear why they do not do it. It is because they want the profit to go somewhere else. It is as simple as that.

The onus of proof, one would have thought, should surely be on the de-nationalisers. With the sole exception of the hon. Member for Hall Green (Mr. Aubrey Jones), there has been no attempt all through the debate to prove that nationalisation has failed. There have been constant assertions without any proof that it has failed, yet production has been at an all-time record and profitability has been increasing. The hon. Member for Esher (Mr. Robson Brown) gave the game away. He said: "This is an act of faith"—a purely doctrinaire approach—that private enterprise will be able to deliver the goods. Hon. Gentlemen opposite know that they are not going back to private enterprise, which in this industry is impossible, so they have set up this device of a supervising board to give some kind of general supervision to the industry.

This is the greatest indictment of the Government's case. The Government have no desire to make the new Board an effective authority over the affairs of the industry. It will be all right provided that the industry and the Board want to go the same way, but once we get a clash and a conflict of interests the Minister will be told, "Leave this to us. We know how to run this thing and we are not going to have any intervention from the Board on this matter. "The power of the trade association will be supreme and the Board will be politely warned off and will pursue a policy of non-intervention, of supervision through the wrong end of a telescope.

There is no possibility whatever—the Minister has said this—that the Government will enter production in this industry against the wishes of the industry. Too much production or an extension of competition will threaten the profits of the established industry. Active Government intervention in the provision of new capacity is inconceivable under this or any other Conservative Government. The powers in the Bill to duplicate the provision of raw materials is a piece of window dressing.

We have been told by the Parliamentary Secretary that all this does not matter and that the Board will do their job through their influence and personality. Of course, that is what we are afraid of. That is the way they will do their job, and their influence will be negligible. It will be a position where the Board will loosely hold the reins while inside the steel interests carry on a struggle for power in secret and away from the public gaze. The Bill is a mere facade.

The Bill will not increase productivity in the industry in the slightest. In fact, all the signs and indications are that it will work against it and that the confusion resulting from the sale of ownership, the division into good and bad sections, the dual control of the Agency and the Board, from further division instead of greater co-ordination and greater integration, is bound to work against the effective, smooth running of the industry.

Let me ask a few questions about what I can only regard as the great sell out, about the Disposals Agency. Can the Minister tell us—because we have had no information so far—how the Agency will work? How long will its job last? Who is to do the buying of the industry and where will the money come from? Can the Minister estimate how much of the industry will be left in the hands of the State in a year or two years' time?

My guess is that a considerable amount of it will be left in the hands of the State under the worst possible conditions. How much will the nation lose on this transaction? None of these questions has been resolved during the discussions on the Bill, except that there has been a very pious hope that we can rely on the Treasury to get the best bargain possible. How can they do this when we know that this is in actual fact a forced sale? It is, in fact, a shot-gun divorce of the industry from the people and we cannot expect much alimony. We must regard this as the great pay-off of those interests which have supported the Tory Party.

The future of our country rests with the steel industry at this time. We need a minimum target of 20 million tons of steel. We have reached the stage of 18 million, but already there is serious talk of over-production, not only in this country but throughout the world. This could easily lead to a regrowth of cartelisation in this industry and of the restriction of production. It is all very well talking about competition when things are on the rise, but once a slump is imminent or under way, different considerations arise.

The hon. Member for Esher said at the end of his speech that we must have an expansionist policy in this industry if we are to survive. I agree. My view is that we cannot get this under denationalisation. The passing of this Measure will cause dismay amongst many people in the industry, not only amongst the workers, but amongst managements and technicians also, who have had a clear field for their ideas since nationalisation. I think it will initiate a long period of division and uncertainty which will distract Government and industry from the real issues of the time. I think it will disintegrate the industry into a patchwork and it will strike a blow to our economy at this most vital stage of our development. What is more important, it will remove one of the strongest weapons of economic planning and control of investment from the hands of the Government, and this may have disastrous results upon the employment of our people and on the prosperity of large areas of the country if there should be a further recession.

The final results of the plan of the Government will be the restoration of a private economic empire which we on this side of the House regard with great disfavour and opposition. The national interest will be put into cold store until another election gives Labour the power to destroy this sordid Measure, and once more bring the iron and steel industry under effective national ownership and control for the benefit of the nation.

8.58 p.m.

Mr. G. R. Strauss (Vauxhall)

The Parliamentary Secretary to the Ministry of Supply, who is not in his place at the moment, opened the debate this afternoon, and in his usual agreeable manner spoke to us about the many laborious hours we have spent in discussing this Bill in Committee and on Report. The hon. Gentleman rightly said that it was improved as a result of those discussions and as a result of the Amendments moved there, mostly from the Labour Benches.

It must be admitted, however, that this was an easy Bill to improve. Its deficiencies, both in detail and substance, were many and varied. It is true that the Minister accepted a number of Amendments, some of a little substance, moved by my hon. Friends and myself. Sometimes it was extraordinary to find that an Amendment which had been rejected during the Committee stage was accepted on the Report stage, not perhaps in the identical words in which we had moved it, but in similar ones.

Our debates were for the most part carried on in an atmosphere of serious deliberation and calm. This, incidentally, appears to have misled some people into thinking that because we did not conduct our business in an atmosphere of fiery passion and personal recrimination, the Labour Party was lukewarm in its opposition to the Bill. It is also true to say—and I am sure that in this I speak for my hon. Friends on this side—that the Minister of Supply piloted this Measure through its various stages with unfailing courtesy and skill.

Nevertheless, the Bill which we have before us today contains, as the Parliamentary Secretary said, no departure from the principles underlying the original Bill. It is, in essence, the Bill that was first produced. Its purpose and effect remain unchanged. It will transfer this great basic industry from public ownership, run in the public interest, to private ownership, run for the benefit of private shareholders. It will divide the industry into profitable plants privately owned, and less profitable and unprofitable plants publicly owned.

The Amendments which the Government have accepted, it should be noted, were all concerned with comparatively minor matters and none of them touched the heart of the matter. The Minister refused to accept any Amendment which sought to preserve for Parliament effective influence over the industry or which sought to give the Board, which is to be set up under the Bill, the powers that it needs to act as an effective supervisory authority over the industry.

On all these vital matters the Government have refused to make any real concession, and the most that we can claim as a result of our hard work in Committee and on Report is that we have been able to modify by 1 per cent. the grave damage that this Bill will do. To put it another way, it is 99 per cent. as obnoxious to us today as when it was first published, and we are as determined as we were then to repeal it as soon as opportunity offers.

Let us consider what will happen when the Bill becomes law. The companies' holdings will be broken up into many units, all loosely bound under the Iron and Steel Federation, whose pre-nationalisation power will be then fully restored. But in future no one will be able to tell the board of any iron and steel producing company to do anything it does not want to do, however much such action may be desirable in the national interest, however strong the case or obvious the need.

No co-ordination of working, no amalgamation—indeed, no steps to raise the efficiency of any section of the industry—can be brought about if the board of any company objects; and there is just as high a proportion of old-fashioned and poor managements in the iron and steel industry as in any other. Those who owe their responsibility not to the public but to the shareholders will henceforth control this industry, subject only to two forms of restriction which the Board may impose.

What are those restrictions? Companies will not be able to sell their products above the maximum prices which the Board may from time to time fix. This function, incidentally, should in our opinion be the Minister's, and not the Board's. The other restriction is the Board's power to veto large development plans. There is nothing new in either of these controls—they have both existed for a long time and exist today. Anyone casually reading the Bill could be excused if he believed the Government's claim that the Board will, in fact, have far more than these negative powers. For does not the famous Clause 3, which we have often discussed, say: It shall be the duty of the Board to exercise a general supervision over the iron and steel industry … with a view to promoting the efficient, economic and adequate supply under competitive conditions of iron and steel products. …"? That sounds most impressive; indeed, it sounds as impressive as it is meant to sound.

It is only when the student of the Bill studies its pages carefully that he will discover that the Board are given no authority whatever to carry out the supervisory duties imposed upon them under this Clause. He will learn, if he studies our proceedings in Committee and on Report stage, that Amendments to give to the Board the necessary authority were consistently rejected by the Government sponsoring this Bill. I cannot think of any previous example in the history of this House where, by statute, a body such as this Board, has been set up and given functions unaccompanied by powers to perform them.

This is no accident, for the Government were in a real dilemma. They could not flout public opinion which demanded some effective control over the industry and which the Government, anxious at election time to please all voters, promised in their Election manifesto. At the same time, the Government did not want to offend the susceptibilities of the steel masters, who, of course, are strongly opposed to any Government interference in their affairs. It is with them, naturally, that the true sympathies of the Government lie; not only their sympathies, but their natural loyalties.

How did the Government get out of this dilemma? How did they try to carry out the promise they gave to the electorate and still not upset the steel masters? They did so by a little sleight of hand. They fulfilled their pledge to make the industry subject to public supervision by putting a sentence in the Bill saying that the industry shall be subject to public supervision. When the Minister is questioned about this he can righteously point to the sentence to which I have referred. The Minister knows well that the steel masters will be completely satisfied because they will fully realise that that sentence is nothing more than an empty and pious—if it is preferred, an impious—declaration and that there is no power behind it whatever. They will be as happy as sandboys because the Board are, in fact, given no authority to control them or, as doubtless they would put it, to molest them.

The Minister has been quite frank about this. He said that the Government were determined that there should be no outside interference in the affairs of the steel industry, except for the two negative controls which I have mentioned. When we pressed the question, what was the use of public supervision if the supervisory body were unable to do anything except collect information, we were never given a reply. The House may believe it or not, but it is a fact that when we pressed in Committee and on Report that the Board should at least have the right to inspect the works which are to come under their purview, we were brushed aside with the reply that that was unnecessary and that it would be unfortunate if iron and steel producers were to feel that the Board were sending round "snoopers" to examine their plants. What a marvellous supervisory body this is to be!

The Minister made a further excuse. He argued that as the Board would be such a responsible body and consist of such respectable people it would be undesirable to give them powers which might be resented by the industry. This might spoil the atmosphere of happy collaboration which he hoped would exist. Incidentally, one would think that such a responsible and respected body would not think it necessary to send round hordes of inspectors.

The Minister seems to believe that it will be possible for a Board of such high standing, such majestic, such almost spiritual qualities, to exercise, without possessing any sanctions, all the guidance and influence over the industry which is required. Listening to the Minister one almost came to the conclusion that in his mind the Board will be a cross between a godfather and a scoutmaster, and that under such guidance everyone will be happy. Certainly, the steelmasters will be happy so long as the Board do not do anything except collect information to put in their annual report. And that is about all they will be able to do, apart from those two negative and restrictive powers which I mentioned.

I would call the attention of the House to the touching faith which the Minister appears to have in the unselfish and ultruistic attitude of the steelmasters. He does not appear to realise that these men—individually, no doubt, decent and worthy people—like representatives of all big business, or large conglomerations of capital, are in duty bound, by their position, to act in a certain way. They are bound to consider as their prime responsibility the interests of those who pay them; that is, the interests of the shareholders in the companies they direct. They have a moral as well as a legal duty to do this, and when there is a conflict between those special interests and the interests of the nation as a whole they are equally bound, unless Parliament has decided otherwise, to sacrifice the latter rather than the former.

Moreover, we know by experience that the leaders of the iron and steel industry are outstanding in their determination to protect the special interests they represent. Whether this is so because the iron and steel industry is particularly large and powerful, or whether it is because of their close and traditional association with the Conservative Party is irrelevant. But we do know that when changes were to take place in the industry which they considered unpalatable they did everything they legally could to defy Parliament, and to stultify some of the activities of the public corporations set up by Parliament. It is nonsense for the Minister of Supply to suggest that in future the nature of the steel-masters will be or can be changed, and that, as a result of the dulcet cooings of the respectable gentlemen on the Board, the lion will turn into a lamb.

To counter the criticism frequently made from this side of the House that the Board will have solely a negative function, the Minister made great play with the authority accorded to him by Clause 4 of the Bill to build new production facilities himself, if the Board advises him to do so, and if no section of the industry is willing to embark on such a project. Like so many other provisions in the Bill, this sounds all right until one starts to think about it. Then one realises that the proposition really is: should it appear at any time that in the national interest the industry ought to increase its productive capacity, and the private owners of the industry are unwilling to risk their money in such a venture, the public must do so.

What a situation. If the present Corporation came to the conclusion that expansion was desirable, it would be effected out of the combined resources of the entire steel industry on whom the risk would fall. But under the set-up proposed in the Bill, private shareholders are to enjoy the profits from the existing plant without any obligation whatever to invest in any expansion which may be nationally desirable. The burden of that must fall on the taxpayer. Again, here we get the position where the private investor takes the profit and the taxpayer bears the risk of a possible loss. Indeed, this seems to be a recurring theme in the Bill. The Minister may argue that this will not happen, because this Clause is unlikely ever to be operated. He said, when we were discussing the White Paper: I personally do not believe that this kind of case will occur."—[OFFICIAL REPORT, 23rd October, 1952; Vol. 505, c. 1285.] It also seems highly improbable to me that a Conservative Government would flout the advice of the Iron and Steel Federation and proceed to build vast plants—nationalised plants as, of course, they would be. Such action would be contrary to all their practice and beliefs. I accept the Minister's statement that this kind of thing is most unlikely to happen. But with that one must accept the inescapable corollary that Clause 4 is nothing more than eyewash to make it appear that this wretched Bill has some virtues which, in fact, it has not got. This attempt certainly does not deceive the Opposition.

Much of our discussion inevitably has centred round the Holding and Realisation Agency. That is a body which will have to carry out the main purpose of the Bill, which is to denationalise the industry. We have tried unsuccessfully, through Amendments which have been rejected one by one by the Government, to ensure that this public property will be sold only at the true value of the assets and securities it holds. The Government rejected our suggestion that the rock-bottom price for the sale of the securities should be the original purchase price.

At the time of nationalisation there were howls of protest from the Conservative Party that these compensation prices were all too low. It was, therefore, not unreasonable to suggest that now that the profits have risen so substantially the 1949 compensation value, subject to such modifications as should properly be taken into account, should be the reserve selling price. But the Government said "No." They also rejected our proposal that the sale of any securities or assets over £1 million should be subject to Ministerial agreement and an affirmative Resolution in the House.

No Government spokesman has dealt with this point. The money which will have to be raised by the new private owners of the industry will be immense. The total compensation paid under the 1949 Act was about £240 million. There will be an additional £300 million for future development to be found during the next five years. Let us consider the compensation paid for some of the major companies. The payments included: English Steel, £21 million; Richard Thomas and Baldwins, £23 million; Stewart and Lloyds, £29,500,000. In the nature of things there will not, and cannot, be competitive bidding for these securities.

The only purchasers in the market will be financial groups headed by the old owners many of whom, we know by their public utterances, are doubtful whether they should re-purchase their old companies. If they make a bid at all it is likely to be a low one. The Agency and the Treasury will then be in this quandary: either they will have to sell at a price substantially below what they know the companies to be worth, calculated on an asset or profit basis or on the 1949 compensation basis, or they will not sell at all.

In that situation strong political pressure is bound to be brought through the Treasury on the Agency to sell even if the purchase price is a wretched one. The Conservative Party will not want to face the criticism of having passed a denationalisation Bill only to find that nothing has happened and that the industry still remains public property. I hope that the Minister will give a clear answer to this question. If the Agency has to decide between selling some of its holdings at a miserably low price or not selling at all, what will it do? We shall be most interested to hear what the right hon. Gentleman says.

There can be no doubt in the mind of anyone in this House or anybody who knows the industry that the values of nearly all the companies have increased immensely since they were nationalised. The profits of the industry taken over by the Corporation in 1949 were about £42 million; that is, the profits of the companies which the Corporation took over. In 1950, they were £53 million, and this year they are likely to be about £75 million. During the Committee stage it was argued by some hon. Members opposite that profits were a test of efficiency, and my hon. Friend the Member for Islington, North (Mr. Fienburgh) pointed out that, if that was so, it would prove that the efficiency of the industry had increased immensely during nationalisation and that the whole case for denationalisation would fall.

We do not accept the view that efficiency and profits are necessarily related, but it is undeniable that under nationalisation the profits of the industry have been greater than ever before in its history. It is mainly because the profits of the industry are so large that, in our view, the Conservative Party are so eager today to divert that flow from the public purse to the pockets of a comparatively small number of private shareholders.

Would there have been the same pressure to denationalise this industry, would this Bill ever have seen the light of day, if for some reason—for example, substantial world over-production—the British iron and steel industry had been losing money during the last year or two, instead of making it? Of course not. Nevertheless, it is in the nature of things that the new potential private owners of this industry will want to buy the companies that are making these big profits as cheaply as possible.

It will not have escaped the notice of the House, or indeed of the public, that while we have been discussing this Bill at length and in detail in Committee and on Report, not only have record profits been announced by the various companies about which we have been talking, but record production figures have been announced for the industry as a whole. We do not claim, and never have claimed, that this increase in production was the direct result of public ownership, but no one can deny that, in spite of the prophecies made by many Conservative spokesmen at the time, that nationalisation would result in falling output and stagnation, the industry under nationalisation, by all tests, is doing better than ever it has done before.

It is noteworthy that at no stage of the Bill's progress has any argument been advanced by anyone on the benches opposite that nationalisation has in any way been detrimental to the industry, while we, on the other hand, have been able to give many examples of its beneficial effect.

There were two arguments put forward today for the first time by Conservative back bench speakers why the industry should be denationalised. One was put forward by the hon. Member for Aylesbury (Mr. Summers), who said he believed that there were plans which the Corporation had in mind which, if imposed on the industry, would do it a great deal of harm. The fact is that the Corporation were shortly going to consider some plans for improving the efficiency of the industry, and, if they had been agreed, they would have been discussed with the industry, and, if found desirable, would have been adopted. It is surely ridiculous to condemn these proposals without knowing what they were or having had an opportunity of considering them.

The other argument was put forward by the hon. Member for Hall Green (Mr. Aubrey Jones), who is not now in his place, who put forward a theory that the nationalised industries did not stand on their own feet to the same extent as industries under private ownership under supervision, and that, therefore, they were not as vigorous and effective. That argument really falls to the ground in view of the special set-up of the nationalised industry, whereby the industries remain independent, and are managed by their own boards of governors. Public control comes in through the holding company—the Corporation. The companies are not run centrally.

We have come to the end of our debates on this Bill, and we say again—and these are the last words we shall speak from these benches—that there can be no excuse, other than political expediency and prejudice, for the Government destroying the present provedly successful structure of the iron and steel industry, and plunging it, and all those who work in it, into years of uncertainty. Rather than leave well alone and allow this industry, free from fears of future disturbance, to enjoy the peaceful prosperity on which it has embarked, the Government have decided to change its shape and ownership in a way which they now know, if they did not know before, is abhorrent to those who believe that this industry should serve national and not private sectional interests.

We can only express our disagreement with this Bill in the strongest possible terms and tell the Government and the country that we shall, at the first opportunity, take such steps as may be necessary to restore this industry to public ownership so as to ensure that it will once more become an effective instrument for planning national prosperity and full employment.

9.26 p.m.

The Minister of Supply (Mr. Duncan Sandys)

I wish to begin by thanking the right hon. Member for Vauxhall (Mr. G. R. Strauss) for his kind words about the way in which the Government have conducted the various stages of this Measure. I should also like to thank several hon. Members on both sides of the House for their kind words about my hon. Friend the Parliamentary Secretary and myself in this connection.

As the right hon. Gentleman has just said, this Bill has now practically run its course and, before it leaves us, I want to thank hon. Members on both sides for the many constructive contributions they have made to our discussions. Throughout all the stages of this Bill our debates have been calm and quiet. I would submit that they have been none the worse for that except, perhaps, at one moment, when they were so quiet that the hon. Member for Dudley (Mr. Wigg) had us counted out.

Those who took part in the Committee stage debates will probably agree that the absence of heat has been more than compensated for by serious argument based upon considerable expert knowledge and conviction, and, in the last few minutes that remain, I certainly do not intend to say anything which will lower the tone or raise the temperature.

On an earlier occasion I thanked the right hon. Member for Vauxhall and his hon. Friends for their co-operation in helping us to get this Bill through its Committee and Report stages in accordance with the time-table on which we had agreed. The hon. Member for Rotherham (Mr. Jack Jones) said this afternoon that the Opposition had conducted themselves in a very fit and becoming manner. Whether he should say that about himself and his hon. Friends I do not know, but I entirely agree that his words sum up the situation. It has all been very proper and seemly. I should also like to thank right hon. and hon. Members opposite for the extremely objective and fair-minded way in which they have examined and discussed our proposals.

During the Second Reading debate hon. Members opposite naturally declared their complete dislike of the policy of de-nationalisation—and we are not pretending that the situation is any different now—but that did not prevent them, during the Committee and Report stages, from applying themselves with considerable zeal and ingenuity to the task of trying to improve the Bill in detail. I am glad that the right hon. Gentleman feels that some improvements, at any rate, have been made.

The hon. Member for Rotherham, who has brought so much expert knowledge and, if I may say so, good common sense to our debates, said on an earlier occasion, "We wish to make the Bill work." I think that was a very generous remark. I will go further: it was typical of the constructive and helpful attitude which has been adopted by the Opposition throughout and which, I think they will agree, we did our best to reciprocate.

On this side of the House I should like to thank my hon. Friends for the support they have given to the Bill and for the valuable speeches they have made at all stages of the proceedings. I would thank them also for the speeches which, in the interests of the time-table, they refrained from making, speeches which, I am sure, would have been equally valuable and interesting.

I want to express my special thanks to the Financial Secretary to the Treasury and to the Solicitor-General for taking charge of important sections of the Bill and for their help in its preparation, but, above all, I am sure the House will be with me when I express my gratitude to my principal partner——

Mr. William Ross (Kilmarnock)

In crime.

Mr. Sandys

—in this enterprise, the Parliamentary Secretary. He has played a major part in the framing of the Bill and his lucid and convincing speeches have, I know, impressed the House with his grasp of these complex industrial problems and have provided further proof of his considerable Parliamentary abilities.

Our proposals for the organisation of the iron and steel industry have been subject, during the last six months, to close and critical scrutiny. They have been debated for 14 days in the House. Outside Parliament they have been examined by producers' organisations, trade unions and consumer interests, and all the various issues involved have been exhaustively discussed in the general and technical Press. I think I can fairly claim that our original proposals, which were set out in the White Paper last July, have stood up pretty well to the test of Parliamentary and public criticism and have emerged without any very fundamental change.

That does not mean that the work which we did together in Committee and on the Report stage was not extremely valuable. Our debates in this House and the reactions from industry outside showed that there were a number of quite serious misunderstandings and fears which it was important to dispel. It was with that object that I accepted or myself initiated quite a number of Amendments.

We were not always able to go quite as far as some would have liked, and we were not able to remove the Opposition's basic objection to de-nationalisation. Nevertheless, I hope it will be generally agreed that the Amendments which have been introduced have gone a long way towards allaying a number of specific anxieties which had been expressed on both sides of the House and in industry.

Apart from removing doubts, there have also been two significant additions to the Bill. The first was to extend the scope of the Bill to embrace the mining of iron ore overseas. With the growing demand for ore throughout the world, it may well be necessary for the British steel industry to participate to an increasing extent in schemes of overseas development.

The other main addition—and I do not accept the criticism made by the hon. and learned Member for Kettering (Mr. Mitchison) that it was not put into the Bill in the first place—is the new Clause which provides for consultation between the Government and the Board in regard to the policy to be adopted towards the High Authority of the Schuman Plan.

I do not accept the criticism of the hon. and learned Member because, at an earlier stage, I explained to the House that it was the Government's firm and declared intention to consult the Board in regard to our relations with and our policy towards the Schuman Authority. What we did was in fact to incorporate in the Bill an intention which I had already declared. I none the less readily accept that it was a good idea to put this Clause into the Bill and to have an intention set out in black and white in an Act of Parliament. The inclusion of this new Clause will, I am sure, be regarded on the Continent as evidence of the importance we attach to our relations with the European Coal and Steel Community.

One of the first effects of the passage of this Bill will be to bring to an end the Iron and Steel Corporation of Great Britain. I should not like this Bill to leave the House of Commons without expressing the thanks of the Government to the members of the Corporation for the services which they have rendered.

Mr. Hobson

A bit belated.

Mr. Sandys

We disapprove of the 1949 Act and of the policy of nationalisation, but we are, none the less, grateful for the efficient and public-spirited way in which the members of the Corporation have discharged the onerous responsibilities which were laid upon them by Parliament.

I myself have greatly valued their advice and co-operation, and I am sure they will agree that, despite the present Government's policy of de-nationalisation, our relations are extremely cordial. In fact, we all had lunch together only the other day. It was very agreeable, though I felt obliged to tell the members of the Corporation that I felt a little bit like the executioner being invited to breakfast in the condemned cell.

The members of the Corporation and the body of able officials which they have built up have undoubtedly acquired valuable knowledge and experience, and I hope that a number of them will in one way or another continue their association with the life of the industry.

A number of points have been raised during this debate. The right hon. Member for Vauxhall asked whether the Government will sell if they can get only a totally inadequate price for iron and steel shares.

Mr. G. R. Strauss

It is rather important. I did not say "totally inadequate," but a price well below what the Agency and the Treasury believe to be a really fair price.

Mr. Sandys

All right, a price well below what the Agency and the Treasury believe to be fair. The answer is, of course, no: firmly, no. Not only have we given that assurance in a number of speeches, but we have now incorporated it in the Bill, in Clause 19, as the right hon. Gentleman knows; and I am glad to repeat that assurance now.

The right hon. Member for Middlesbrough, East (Mr. Marquand) said that the Bill provides no safeguard against monopoly. I was frankly amazed at his remark. I would remind him that the 1949 Act set up a vast State monopoly. It also deliberately took that monopoly out of the scope of the Monopolies Commission. What we are now doing is to bring to an end this Socialist State monopoly by returning the steel companies to separate private ownership, and meanwhile, in order that there shall be no delay, we are bringing the publicly-owned companies back under the supervision of the Monopolies Commission on the appointed day.

The hon. Member for Rotherham said that, in the whole of the discussions on this Bill, there had not been adduced a single word to show why it was necessary. I would remind him that I spoke about this at considerable length in the debate on the White Paper and again on the Second Reading. I cannot go into detail at this late hour, but the short answer to the hon. Member has been provided by the right hon. and learned Gentleman the Member for St. Helens (Sir H. Shawcross)—whom I am sorry not to see here tonight—in a speech which he made over the week-end. He said—and I am quoting from "The Times"— There are some who call a little blindly for more nationalisation as if it were a method of solving all our problems. I do not think so; that is a doctrinaire view. He went on to say—this is the point, and I hope that hon. Members will listen to this— There are industries which it would be folly to take into public ownership—those, for instance, which do a considerable foreign trade and on which our exports depend,…and those which are operating efficiently and to capacity already. Those words precisely describe the steel industry. We agree with the right hon. and learned Gentleman that it was folly to nationalise it. By the Iron and Steel Act of 1953 we shall undo the folly of the Iron and Steel Act of 1949.

The hon. and learned Member for Kettering—I do not see him in his place——

Mr. Mitchison

Because the right hon. Gentleman is not looking in the right place.

Mr. Sandys

—likened me to the dormouse in the Mad-Hatter's tea party. I do not altogether gather the relevance to the Bill, but I have obtained from the inexhaustible resources of the Ministry of Supply a copy of "Alice in Wonderland," and I will, if the hon. and learned Gentleman will allow me, answer him with the reply which was given by Alice to the Mad Hatter. She said: You should learn not to make personal remarks. It's very rude. The hon. Member for Sheffield, Park (Mr. Mulley) said that the Opposition would have been more ready to succumb to my embraces if I had offered them bouquets of roses instead of cabbages. Perhaps our attitude on this side of the House is more practical.

The hon. Member also said that I did not want the Board to act in the public interest. I interrupted him at the time, but he continued his argument, and I feel I must reply. It is a complete misrepresentation of everything that I and the Parliamentary Secretary have said, and it is refuted by the Bill itself. In order to clarify the position—because there was misunderstanding during the Committee stage—I myself introduced an Amendment. The right hon. Gentleman the Member for Vauxhall said he was surprised that we sometimes resisted an Amendment at one point and then introduced another at a later stage which partly met it. That seems to me to be the best Parliamentary practice; it is exactly what we hope will happen during Committee and Report stages.

I would remind the hon. Member for Sheffield, Park that I moved the following Amendment to Clause 5 (2): Without prejudice to the promotion of the efficient, economic and adequate supply of iron and steel products, the Board shall, in their consultations under the preceding subsection"— that relates to development, which is the main point hon. Members had in mind— have regard to any considerations relating to employment in Great Britain or otherwise relating to the national interest to which the Minister may have asked them to have regard. That completely refutes the hon. Member's accusations.

Mr. Mulley

My point resulted from the fact that the Minister refused an Amendment to Clause 3, which lays downs the duties of the Board, and led his party into the Division Lobby to prevent our inserting words to the effect that the Board should act in the public interest. If he wants the Board to act in the public interest, surely there is no point in his voting against a proposal of that sort.

Mr. Sandys

I explained at the time what we consider to be the difference between the two proposals. We believe the Board is qualified and competent to judge what is right for the industry, but we believe that it is the responsibility of the Government to decide what are the wider national interests. The Amendment which I have just read does not leave the Board to decide what is in the national interest but asks it to take into account considerations relating to the national interest which are brought to its notice by the Government. That is a different matter.

I understand the feelings of disappointment and regret—I say this with all sincerity—of hon. Members opposite at seeing the repeal of the 1949 Act and the dissolution of the Corporation which they set up so recently. It may be a little consolation to them to know that this Bill is by no means solely a repealing Measure. Far from it. De-nationalisation is only one chapter. The greater part of this Bill relates to the creation of a new organisation to promote the efficiency of the industry and to safeguard the interests of the community. We are not just pulling down the structure of nationalisation; we are putting up an alternative in its place.

Though our approach is different, I think that, in all parts of the House there is agreement upon the main objectives. We want a steel industry which is efficient and flexible, whose output is sufficient to meet the needs of our metal-using industries at home and the export trade, which charges fair prices, which provides good conditions for those who work in it, and which conducts its affairs with a sense of public responsibility.

We are also agreed that there should be a measure of public supervision or control, if hon. Members opposite prefer that word. The hon. Member for Rotherham said today that the supervision of the Corporation was perfectly adequate now. Why then, he asked, did we want to set up a new Board. We have never claimed that the powers of the Corporation are inadequate. That is not the issue. The difference between us is that the Opposition believe that public supervision can only be effective under public ownership. Our case is that the public interest can be fully and faithfully protected without needlessly throwing away the invaluable stimulus and driving force of private enterprise.

The greater part of our debates have centred on this question of supervision and, in particular, on the powers of the Board. The Bill gives the Board a number of specific powers which will be sufficient to enable it to discharge the heavy responsibilities which will fall upon it. The Opposition would like to arm the Board with greater powers to give orders and impose punishments. We do not share that view. The Board's real authority will depend not so much upon their power to command obedience, as on their power to command respect and good will.

The co-operation of industry will, of course, be of cardinal importance to the Board. But if there is anything in this uncertain world which can safely be assumed, it is that the steel industry will co-operate with the Board. Over many long years the steel industry has cooperated with successive Governments over prices, over development and over the level of output. There is no reason to suppose that its sense of public duty and responsibility are going to desert it now.

Besides that, hon. Members opposite, by their threats of re-nationalisation, have given the industry an additional incentive to make a success of the new organisation. The party opposite are not exactly pillars of the temple of free enterprise, but the pressures which they exert upon it sometimes act as valuable buttresses outside.

Another point on which our debates revealed an apparent difference between us was about the powers which the Government should have over the Board. The Opposition would like to give the Government unlimited powers to give instruction to the Board about their duties. In fact, they asked for powers more sweeping than were provided in the 1949 Act. In our opinion, the leadership and supervision of the industry in general should be the responsibility of the Board, who will be better qualified to handle industrial and technical matters than a Government Department. It is only when the wider interests of the nation are affected that the Government should consider intervening.

My hon. Friend the Member for Blackley (Mr. E. Johnson) said that we must have a strong Board. It is quite certain that if the Government were to make a habit of interfering frequently and without sufficient cause, the influence and authority of the Board would soon be thoroughly undermined. Our intention is that there should be a Board which is a strong, independent statutory body and not just an appendage of the Ministry of Supply.

I recognise that the Opposition do not believe that the public interest can be effectively safeguarded by the system of supervision which we propose and that they fear that this scheme will fail. Nevertheless, I believe that they are public spirited enough to hope that it will succeed. In any case, I think we can rely upon them to judge the results with the same objective fair-mindedness as they have shown in our debates on this Bill.

If the system should fail through lack of co-operation by the industry or for any such reason, the industry will have no right to expect any mercy from the party opposite. If, on the other hand, the Board should prove successful, as we believe it will, I am confident that hon. Members opposite will not, for purely party reasons, wish to disturb it. We feel very sure that this scheme will succeed and we have many reasons for our confidence. The main reason is that

it is not based upon untried political theories but upon practical industrial experience built up over long years.

In this Bill we have, in fact, codified in legislative form the mutual responsibilities and relationships, and the traditions and practice of co-operation between Government, producers, trade unions and consumers, which have been evolving in the steel industry for at least 20 years. That, I submit, is a firm foundation on which to build, and one which will not easily be shaken.

I appeal to all who have the best interests of this industry and of the community at heart to accept these moderate, progressive proposals as a fair, reasonable and lasting settlement.

Question put, "That the Bill be now read the Third time."

The House divided: Ayes. 304; Noes, 271.

Division No. 122.]	AYES	[10.0 p.m.
Aitken, W. T.	Churchill, Rt. Hon. W. S.	Godber, J. B.
Allan, R. A. (Paddington, S.)	Clarke, Col. Ralph (East Grinstead)	Gomme-Duncan, Col. A.
Alport, C. J. M.	Clarke, Brig. Terence (Portsmouth, W.)	Gough, C. F. H.
Amery, Julian (Preston, N.)	Cole, Norman	Gower, H. R.
Amory, Heathcoat (Tiverton)	Colegate, W. A.	Graham, Sir Fergus
Anstruther-Gray, Major W. J.	Conant, Maj. R. J. E.	Gridley, Sir Arnold
Arbuthnot, John	Cooper, Sqn. Ldr. Albert	Grimond, J.
Ashton, H. (Chelmsford)	Cooper-Key, E. M.	Grimston, Hon. John (St. Albans)
Assheton, Rt. Hon. R. (Blackburn, W.)	Craddock, Beresford (Spelthorne)	Grimston, Sir Robert (Westbury)
Astor, Hon. J. J.	Cranborne, Viscount	Hall, John (Wycombe)
Baker, P. A. D.	Crookshank, Capt. Rt. Hon. H. F. C.	Harden, J. R. E.
Baldock, Lt.-Cmdr. J. M.	Crosthwaite-Eyre, Col. O. E.	Hare, Hon. J. H.
Baldwin, A. E.	Crouch, R. F.	Harris, Frederic (Croydon, N.)
Banks, Col. C.	Crowder, Sir John (Finchley)	Harris, Reader (Heston)
Barber, Anthony	Crowder, Petro (Ruislip—Northwood)	Harrison, Col. J. H. (Eye)
Barlow, Sir John	Cuthbert, W. N.	Harvey, Air Cdre. A. V. (Macclesfield)
Baxter, A. B.	Darling, Sir William (Edinburgh, S.)	Harvey, Ian (Harrow, E.)
Beach, Maj. Hicks	Davidson, Viscountess	Harvie-Watt, Sir George
Beamish, Maj. Tufton	Davies, Rt. Hn. Clement (Montgomery)	Hay, John
Bell, Philip (Bolton, E.)	De la Bère, Sir Rupert	Heald, Sir Lionel
Bell, Ronald (Bucks, S.)	Deedes, W. F.	Heath, Edward
Bennett, F. M. (Reading, N.)	Digby, S. Wingfield	Henderson, John (Cathcart)
Bennett, Dr. Reginald (Gosport)	Dodds-Parker, A. D.	Higgs, J. M. C.
Bevins, J. R. (Toxteth)	Donaldson, Cmdr. C. E. McA.	Hill, Dr. Charles (Luton)
Birch, Nigel	Doughty, C. J. A.	Hill, Mrs. E. (Wythenshawe)
Bishop, F. P.	Douglas-Hamilton, Lord Malcolm	Hinchingbrooke, Viscount
Black, C. W.	Drayson, G. B.	Hirst, Geoffrey
Boothby, R. J. G.	Drewe, C.	Holland-Martin, C. J.
Bossom, A. C.	Dugdale, Rt. Hn. Sir Thomas (Richmond)	Holmes, Sir Stanley (Harwich)
Bowen, E. R.	Duncan, Capt. J. A. L.	Holt, A. F.
Boyd-Carpenter, J. A.	Eccles, Rt. Hon. D. M.	Hope, Lord John
Boyle, Sir Edward	Elliot, Rt. Hon. W. E.	Hopkinson, Rt. Hon. Henry
Braine, B. R.	Fell, A.	Hornsby-Smith, Miss M. P
Braithwaite, Sir Albert (Harrow, W.)	Finlay, Graeme	Horobin, I. M.
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)	Fisher, Nigel	Horsbrugh, Rt. Hon. Florence
Bromley-Davenport, Lt.-Col. W. H.	Fletcher-Cooke, C	Howard, Gerald (Cambridgeshire)
Brooke, Henry (Hampstead)	Fort, R.	Howard, Hon. Greville (St. Ives)
Brooman-White, R. C.	Foster, John	Hudson, Sir Austin (Lewisham, N.)
Browne, Jack (Govan)	Fraser, Hon. Hugh (Slone)	Hudson, W. R. A. (Hull, N.)
Bullard, D. G.	Fraser, Sir Ian (Morecambe & Lonsdale)	Hulbert, Wing Cdr. N. J.
Bullus, Wing Commander E. E.	Fyfe, Rt. Hon. Sir David Maxwell	Hurd, A. R.
Burden, F. F. A.	Galbraith, Rt. Hon. T. D. (Pollok)	Hutchinson, Sir Geoffrey (Ilford, N.)
Butler, Rt. Hon. R. A. (Saffron Walden)	Galbraith, T. G. D. (Hillhead)	Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Campbell, Sir David	Gammans, L. D.	Hutchison, James (Scotstoun)
Carr, Robert	Garner-Evans, E. H.	Hyde, Lt.-Col. H. M.
Cary, Sir Robert	George, Rt. Hon. Maj. G. Lloyd	Hylton-Foster, H. B. H.
Channon, H.	Glyn, Sir Ralph	Jenkins, Robert (Dulwich)
Jennings, R.	Moore, Lt.-Col. Sir Thomas	Soames, Capt. C.
Johnson, Eric (Blackley)	Morrison, John (Salisbury)	Spearman, A. C. M
Johnson, Howard (Kemptown)	Mott-Radclyffe, C. E.	Speir, R. M.
Jones, A. (Hall Green)	Nabarro, G. D. N.	Spens, Sir Patrick (Kensington, S.)
Joynson-Hicks, Hon. L. W	Nicholis, Harmar	Stanley, Capt. Hon. Richard
Kaberry, D.	Nicholson, Godfrey (Farnham)	Stevens, G. P.
Keeling, Sir Edward	Nicolson, Nigel (Bournemouth, E.)	Steward, W. A. (Woolwich, W.)
Kerr, H. W.	Nield, Basil (Chester)	Stewart, Henderson (Fife, E.)
Lambert, Hon. G.	Noble, Cmdr. A. H. P.	Soddart-Soott, Col. M.
Lambton, Viscount	Nugent, G. R. H.	Storey, S.
Lancaster, Col. C. G.	Oakshott, H. D.	Strauss, Henry (Norwich, S.)
Langford-Holt, J. A.	Odey, G. W.	Stuart, Rt. Hon. James (Moray)
Law, Rt. Hon. R. K.	O'Neill, Phelim (Co. Antrim, N.)	Studholme, H. G.
Leather, E. H. C.	Ormsby-Gore, Hon. W. D.	Summers, G. S.
Legge-Bourke, Maj. E. A. H	Orr, Capt. L. P. S.	Sutcliffe, Sir Harold
Legh, Hon. Peter (Petersfield)	Orr-Ewing, Charles Ian (Hendon, N.)	Taylor, Charles (Eastbourne)
Lennox-Boyd, Rt. Hon. A. T	Orr-Ewing, Sir Ian (Weston-super-Mare)	Taylor, William (Bradford, N.)
Lindsay, Martin	Osborne, C.	Teeling, W.
Linstead, H. N.	Partridge, E.	Thomas, Rt. Hon. J. P. L. (Hereford)
Llewellyn, D. T.	Peaks, Rt. Hon. O.	Thomas, Leslie (Canterbury)
Lloyd, Rt. Hon. G. (King's Norton)	Perkins, W. R. D.	Thomas, P. J. M. (Conway)
Lloyd, Maj. Sir Guy (Renfrew, E.)	Pete, Brig. C. H. M.	Thompson, Kenneth (Walton)
Lloyd, Rt. Hon. Selwyn (Wirral)	Peyton, J. W. W.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Lockwood, Lt.-Col. J. C.	Pickthorn, K. W. M.	Thorneycroft Rt. Hn. Peter (Monmouth)
Longden, Gilbert	Pilkington, Capt. R. A	Thornton-Kemsley, Col. C N.
Low, A. R. W.	Pitman, I. J.	Tilney, John
Lucas, Sir Jocelyn (Portsmouth, S.)	Powell, J. Enoch	Touche, Sir Gordon
Lucas, P. B. (Brantford)	Price, Henry (Lewisham, W.)	Turner, H. F. L.
Lucas-Tooth, Sir Hugh	Profumo, J. D.	Turton, R. H.
Lyttelton, Rt. Hon. O.	Raikes, Sir Victor	Tweedsmuir, Lady
McAdden, S. J.	Rayner, Brig. R.	Vane, W. M. F.
McCallum, Major D.	Redmayne, M.	Vaughan-Morgan, J. K
McCorquodale, Rt. Hon. M. S.	Rees-Davies, W. F.	Vesper, D. F.
Macdonald, Sir Peter	Remnant, Hon. P.	Wade, D. W.
Mackeson, Brig. H. R.	Renton, D. L. M.	Wakefield, Edward (Derbyshire, W.)
McKibbin, A. J.	Roberts, Peter (Heeley)	Wakefield, Sir Wavell (St. Marylebone)
McKie, J. H. (Galloway)	Robertson, Sir David	Walker-Smith, D. C.
Maclay, Rt. Hon. John	Robinson, Roland (Blackpool, S.)	Ward, Hon. George (Worcester)
Maclean, Fitzroy	Robson Brown, W.	Ward, Miss I. (Tynemouth)
Macleod, Rt. Hon. Iain (Enfield, W.)	Rodgers, John (Sevenoaks)	Waterhouse, Capt. Rt. Hon. C.
MacLeod, John (Ross and Cromarty)	Roper, Sir Harold	Watkinson, H. A.
Macmillan, Rt. Hon. Harold (Bromley)	Ropner, Col. Sir Leonard	Webbe, Sir H. (London & Westminster)
Macpherson, Niall (Dumfries)	Russell, R. S.	Wellwood, W.
Maitland, Comdr. J. F. W. (Horncastle)	Ryder, Capt. R. E. D.	Williams, Rt. Hon. Charles (Torquay)
Maitland, Patrick (Lanark)	Salter, Rt. Hon. Sir Arthur	Williams, Gerald (Tonbridge)
Manningham-Buller, Sir R. E.	Sandys, Rt. Hon. D.	Williams, Sir Herbert (Croydon, E.)
Markham, Major S. F.	Savory, Prof. Sir Douglas	Williams, R. Dudley (Exeter)
Marlowe, A. A. H.	Schofield, Lt.-Col. W.	Wills, G.
Marples, A. E.	Scott, R. Donald	Wilson, Geoffrey (Truro)
Marshall, Douglas (Bodmin)	Scott-Miller, Cmdr. R.	Wood, Hon. R.
Marshall, Sir Sidney (Sutton)	Shepherd, William	York, C.
Maude, Angus	Simon, J. E. S. (Middlesbrough, W.)
Maydon, Lt.-Comdr. S. L. C.	Smithers, Peter (Winchester)	TELLERS FOR THE AYES:
Medlicott, Brig. F.	Smithers, Sir Waldron (Orpington)	Mr. Buchan-Hepburn and
Molson, A. H. E.	Smyth, Brig. J. G. (Norwood)	Sir Herbert Butcher.
Monckton, Rt. Hon. Sir Walter	Snadden, W. McN
NOES
Adams, Richard	Braddock, Mrs. Elizabeth	Davies, Ernest (Enfield, E.)
Albu, A. H.	Brockway, A. F.	Davies, Harold (Leek)
Allen, Arthur (Bosworth)	Brook, Dryden (Halifax)	Davies, Stephen (Merthyr)
Allen, Scholefield (Crewe)	Broughton, Dr. A. D. D.	de Freitas, Geoffrey
Anderson, Alexander (Motherwell)	Brown, Rt. Hon. George (Balper)	Deer, G.
Anderson, Frank (Whitehaven)	Brown, Thomas (Ince)	Delargy, H. J.
Attlee, Rt. Hon. C. R.	Burke, W. A.	Dodds, N. N.
Awbery, S. S.	Burton, Miss F. E.	Donnelly, D. L.
Bacon, Miss Alice	Butler, Herbert (Hackney, S.)	Driberg, T. E. N.
Baird, J.	Carmichael, J.	Dugdale, Rt. Hon. John (W. Bromwich)
Balfour, A.	Castle, Mrs. B. A.	Ede, Rt. Hon. J. C.
Barnes, Rt. Hon. A.J.	Champion, A. J.	Edwards, John (Brighouse)
Bartley, P.	Chapman, W. D.	Edwards, Rt. Hon. Ness (Caerphilly)
Bellenger, Rt. Hon. F. J.	Chetwynd, G. R.	Edwards, W. J. (Stepney)
Bence, C. R.	Clunie, J.	Evans, Albert (Islington, S.W.)
Benn, Hon. Wedgwood	Coldrick, W.	Evans, Edward (Lowestoft)
Benson, G.	Collick, P. H.	Evans, Stanley (Wednesbury)
Beswick, F.	Corbel, Mrs. Freda	Fernyhough, E.
Bevan, Rt. Hon. A. (Ebbw Vale)	Cove, W. G.	Fienburgh, W.
Bing, G. H. C.	Craddock, George (Bradford, S.)	Finch, H. J.
Blackburn, F.	Crosland, C. A. R.	Fletcher, Eric (Islington, E.)
Blenkinsop, A.	Grossman, R. H. S.	Follick, M.
Blyton, W. R.	Cullen, Mrs. A	Foot, M. M.
Boardman, H.	Daines, P.	Forman, J. C.
Bottomley, Rt. Hon. A. G.	Dalton, Rt. Hon. H.	Fraser, Thomas (Hamilton)
Bowles, F. G.	Darling, George (Hillsborough)	Freeman, John (Watford)

Freeman, Peter (Newport)	MacMillan, M. K. (Western Isles)	Silverman, Julius (Erdington)
Gaitskell, Rt. Hon. H. T. N.	McNeil, Rt. Hon. H.	Silverman, Sydney (Nelson)
Glanville, James	MacPherson, Malcolm (Stirling)	Simmons, C. J. (Brierley Hill)
Gooch, E. G.	Mainwaring, W. H.	Slater, J.
Gordon Walker, Rt. Hon. P. C.	Mallalieu, E. L. (Brigs)	Smith, Ellis (Stoke, S.)
Greenwood, Anthony (Rossendale)	Mellalieu, J. P. W. (Huddersfield, E.)	Smith, Norman (Nottingham, S.)
Greenwood, Rt. Hn. Arthur (Wakefield)	Mann, Mrs. Jean	Snow, J. W.
Grenfell, Rt. Hon. D. R.	Manuel, A. C.	Sorensen, R. W.
Grey, C. F.	Marquand, Rt. Hon. H. A.	Soskice, Rt. Hon. Sir Frank
Griffiths, David (Rother Valley)	Mayhew, C. P.	Sparks, J. A.
Griffiths, Rt. Hon. James (Llanelly)	Mellish, R. J	Steele, T.
Griffiths, William (Exchange)	Messer, F.	Stewart, Michael (Fulham, E.)
Hale, Leslie	Mitchlson, G. R.	Stokes, Rt. Hon. R. R.
Hall, Rt. Hon. Glenvil (Colne Valley)	Monslow, W.	Strachey, Rt. Hon. J.
Hall, John T. (Gateshead, W.)	Morgan, Dr. H. B. W	Strauss, Rt. Hon. George (Vauxhall)
Hamilton, W. W.	Morley, R.	Stress, Dr. Barnett
Hannan, W.	Morris, Percy (Swansea, W.)	Summerskill, Rt. Hon. E.
Hardy, E. A.	Mort, D. L.	Swingler, S. T.
Hargreaves, A.	Moyle, A.	Sylvester, G. O.
Harrison, J. (Nottingham, E.)	Mulley, F. W.	Taylor, Bernard (Mansfield)
Hastings, S.	Murray, J. D.	Taylor, John (West Lothian)
Hayman, F. H.	Nally, W.	Taylor, Rt. Hon Robert (Morpeth)
Healey, Denis (Leeds, S.E.)	Neal, Harold (Bolsover)	Thomas, David (Aberdare)
Henderson, Rt. Hon. A. (Rowley Regis)	Noel-Baker, Rt. Hon. P. J.	Thomas, George (Cardiff)
Herbison, Miss M.	O'Brien, T.	Thomas, Iorwerth (Rhondda, W.)
Hewitson, Capt. M	Oldfield, W. H.	Thomas, Ivor Owen (Wrekin)
Hobson, C. R.	Oliver, G. H	Thomson, George (Dundee, E.)
Holman, P.	Orbach, M.	Thorneycroft, Harry (Clayton)
Holmes, Horace (Hemsworth)	Oswald, T.	Thornton, E.
Houghton, Douglas	Padley, W. E.	Timmons, J.
Hay, J. H.	Paget, R. T.	Tomney, F.
Hudson, James (Ealing, N.)	Paling, Rt. Hon. W. (Dearne Valley)	Turner-Samuels, M.
Hughes, Emrys (S. Ayrshire)	Paling, Will T. (Dewsbury)	Ungoed-Thomas, Sir Lynn
Hughes, Hector (Aberdeen, N.)	Palmer, A. M. F.	Osborne, H. C.
Hynd, H. (Accrington)	Pannell, Charles	Viant, S. P.
Irvine, A. J. (Edge Hill)	Pargiter, G. A.	Wallace, H. W.
Irving, W. J. (Wood Green)	Parker, J.	Webb, Rt. Hon. M. (Bradford, C.)
Isaacs, Rt. Hon. G. A	Paton, J.	Weitzman, D.
Janner, B.	Peart, T. F.	Wells, Percy (Faversham)
Jay, Rt. Hon. D. P. T.	Plummer, Sir Leslie	Wells, William (Walsall)
Jeger, George (Goole)	Poole, C. C.	West, D. G.
Jeger, Dr Santo (St. Pancras, S.)	Popplewell, E.	Wheatley, Rt. Hon. John
	Porter, G.	Wheeldon, W. E.
Jenkins, R. H. (Stechford)	Price, Joseph T. (Westhoughton)	White, Mrs. Eirene (E. Flint)
Johnson, James (Rugby)	Price, Philips (Gloucestershire, W.)	White, Henry (Derbyshire, N.E.)
Jones, David (Hartlepool)	Proctor, W. T.	Whiteley, Rt. Hon. W.
Jones, Frederick Elwyn (West Ham, S.)	Pryde, D. J.	Wigg, George
Jones, Jack (Rotherham)	Pursey, Cmdt. H.	Wilcock, Group Capt. C. A. B
Jones, T. W. (Merioneth)	Rankin, John	Wilkins, W. A.
Keenan, W.	Reeves, J.	Willey, F. T.
Kenyon, C.	Reid, Thomas (Swindon)	Williams, David (Neath)
Key, Rt. Hon. C. W.	Reid, William (Camlachle)	Williams, Rev. Llywelyn (Abertillery)
King, Dr. H. M.	Rhodes, H.	Williams, Ronald (Wigan)
Lee, Frederick (Newton)	Richards, R.	Williams, W. R. (Droylsden)
Lee, Miss Jennie (Cannock)	Robens, Rt. Hon. A.	Williams, W. T. (Hammersmith, S.)
Lever, Harold (Cheetham)	Roberts, Albert (Normanton)	Wilson, Rt. Hon. Harold (Huyton)
Lever, Leslie (Ardwick)	Roberts, Goronwy (Caernarvon)	Winterbottom, Ian (Nottingham, C.)
Lewis, Arthur	Robinson, Kenneth (St. Pancras, N.)	Winerbottom, Richard (Brightside)
Lindgren, G. S.	Rogers, George (Kensington, N.)	Woodburn, Rt. Hon A
Lipton, Lt.-Col. M.	Ross, William	Wyatt, W. L.
Logan, D. G.	Royle, C.	Yates, V. F.
MacColl, J. E.	Shackleton, E. A. A.	Younger, Rt. Hon. K.
McGhee, H. G.	Shawcross, Rt. Hon. Sir Hartley
McGovern, J.	Shinwell, Rt. Hon. E.	TELLERS FOR THE NOES:
McInnes, J.	Short, E. W	Mr. Bowden and Mr. Pearson
McLeavy, F.	Shurmer, P. L. E.

Bill accordingly read the Third time, and passed.